ThE IllINOIS ASSOCIATION OF DEFENSE TRIAl COUNSEl Third

Transcription

The Illinois Association of Defense Trial Counsel
Third Quarter 2015 l Volume 25, Number 3 l ISSN-2169-3668
Illinois Association of
Defense Trial Counsel
WWW.iadtc.org
PRESIDENT
TROY a. BOZARTH
HeplerBroom LLC, Edwardsville
PRESIDENT-ELECT
R. MARK MIFFLIN
Giffin, Winning, Cohen & Bodewes, P.C.,
Springfield
1ST VICE PRESIDENT
MICHAEL L. RESIS
SmithAmundsen LLC, Chicago
2ND VICE PRESIDENT
Bradley C. Nahrstadt
Lipe, Lyons, Murphy, Nahrstadt &
Pontikis Ltd., Chicago
SECRETARY/TREASURER
WILLIAM k. MCVISK
Johnson & Bell, Ltd., Chicago
Directors
Laura K. Beasley
Joley, Oliver & Beasley, P.C., Belleville
Joseph A. Bleyer
Bleyer and Bleyer, Marion
JEREMY T. BURTON
Pontikis Ltd., Chicago
R. Mark Cosimini
Rusin & Maciorowski, Ltd., Champaign
BRUCE DORN
Bruce Farrel Dorn & Associates, Chicago
donald patrick eckler
Pretzel & Stouffer, Chartered, Chicago
JOSEPH G. FEEHAN
Heyl, Royster, Voelker & Allen, P.C., Peoria
Terry A. Fox
Kelley Kronenberg, Chicago
EDWARD K. GRASSÉ
Busse, Busse & Grassé, P.C., Chicago
JENNIFER K. GUST
Resolute Management, Inc., Chicago
Stephen G. Loverde
Law Office of Steven A. Lihosit, Chicago
Paul R. Lynch
Craig & Craig, LLC, Mt. Vernon
NICOLE D. MILOS
Cremer, Spina, Shaughnessy, Jansen &
Siegert, LLC, Chicago
DONALD J. O’MEARA, JR.
SCOTT D. STEPHENSON
Litchfield Cavo LLP, Chicago
Tracy E. Stevenson
Robbins Salomon & Patt, Ltd., Chicago
PATRICK W. STUFFLEBEAM
MicHELLE M. WAHL
Swanson, Martin & Bell, LLP, Chicago
EXECUTIVE DIRECTOR
Sandra J. Wulf, CAE, IOM
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 • Glen E. Amundsen • Steven M. Puiszis • Jeffrey
S. Hebrank • Gregory L. Cochran • Rick Hammond • Kenneth F. Werts • Anne M.
Oldenburg • R. Howard Jump • Aleen R. Tiffany • David H. Levitt
COLUMNISTS
James K. Borcia — Tressler LLP, Chicago
Troy A. Bozarth — HeplerBroom LLC, Edwardsville
Lindsay Drecoll Brown — Cassiday Schade LLP, Chicago
Roger R. Clayton — Heyl, Royster, Voelker & Allen, P.C., Peoria
Patrick D. Cloud — Heyl, Royster, Voelker & Allen, P.C., Edwardsville
Catherine A. Cooke — Robbins, Salomon & Patt, Ltd., Chicago
Stacy E. Crabtree — Heyl, Royster, Voelker & Allen, P.C., Peoria
Donald Patrick Eckler — Pretzel & Stouffer, Chartered, Chicago
Brad A. Elward — Heyl, Royster, Voelker & Allen, P.C., Peoria
Joseph G. Feehan — Heyl, Royster, Voelker & Allen, P.C., Peoria
Scott L. Howie — Pretzel & Stouffer, Chartered, Chicago
Bradford B. Ingram — Heyl, Royster, Voelker & Allen, P.C., Peoria
Gregory W. Odom — HeplerBroom LLC, Edwardsville
Bradford J. Peterson — Heyl, Royster, Voelker & Allen, P.C., Urbana
Dina L. Torrisi — HeplerBroom LLC, Chicago
CONTRIBUTORS
Daniel J. Berkowitz — Kopon Airdo LLC, Chicago
Mary H. Cronin — Pretzel & Stouffer, Chartered, Chicago
John D. Hackett — Cassiday Schade LLP, Chicago
Jamie L. Hull — Cassiday Schade LLP, Chicago
Zeke N. Katz — HeplerBroom LLC, Chicago
Brad W. Keller — Heyl, Royster, Voelker & Allen, P.C., Peoria
Kelly A. Kono — Pretzel & Stouffer, Chartered, Chicago
Seth D. Lamden — Neal, Gerber & Eisenberg, LLP, Chicago
Aimee K. Lipkis — Cray Huber Horstman Heil & VanAusdal LLC, Chicago
Gregory J. Rastatter — Heyl, Royster, Voelker & Allen, P.C., Peoria
J. Matthew Thompson — Heyl, Royster, Voelker & Allen, P.C., Peoria
John J. Vitanovec — Cassiday Schade LLP, Chicago
Mollie N. Werwas — Kopon Airdo LLC, Chicago
IDC Quarterly
Editorial Board
IN THIS ISSUE
Brad A. Elward, Editor-in-Chief
[email protected]
Edward J. Aucoin, Jr., Executive Editor
[email protected]
John F. Watson, Associate Editor
Craig & Craig, LLC, Mattoon
[email protected]
Tara Wiebusch Kuchar, Assistant Editor
[email protected]
J. Matthew Thompson, Assistant Editor
[email protected]
Catherine A. Cooke, Assistant Editor
Robbins, Salomon & Patt, Ltd., Chicago
[email protected]
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 $100 per year. Single
copies are $25 plus $5 for postage and handling.
Requests for subscriptions or back issues should be
sent to the Illinois Association of Defense Trial Counsel
headquarters in Rochester, Illinois. Subscription price
for members is included in membership dues.
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 Stylistic Requirements is
available upon request from The Illinois Association
of Defense Trial Counsel office in Rochester, 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 will be
subjected to editing and become the property of the
IDC Quarterly, unless special arrangements are made.
Monograph
M-IFrom Envirodyne and Beyond: The Use of Extrinsic Evidence
to Defeat and Create a Duty to Defend in Illinois,
by John D. Hackett, Jamie L. Hull, Seth D. Lamden, Mollie N. Werwas
and Daniel J. Berkowitz
Feature Articles
10
Carrying the Burden of Proving a Claim of Discrimination Under the
Pregnancy Discrimination Act following the Supreme Court’s Decision
in Young v. UPS, by Donald Patrick Eckler and Mary H. Cronin
32
The Abused Respondent in Discovery Statute, by Aimee K. Lipkis
Columns
42
Appellate Practice Corner, by Scott L. Howie
57
Association News
21
Civil Practice and Procedure, by Donald Patrick Eckler and Kelly A. Kono
45
Civil Rights Update, by Bradford B. Ingram
26
Commercial Law, by James K. Borcia
17
Construction Law, by Lindsay Drecoll Brown and John J. Vitanovec
8
51
Evidence and Practice Tips, by Joseph G. Feehan and Brad W. Keller
14
Health Law, by Roger R. Clayton, Gregory J. Rastatter and J. Matthew Thompson
2
IDC 2015 – 2016 Board of Directors
4
IDC 2015 – 2016 Committee Chairs and Vice Chairs
66
IDC Deposition Academy Registration
Editor’s Note, by Brad A. Elward
71
IDC Membership and Committee Applications
Statements or expression of opinions in this publication are those of the authors and not necessarily
those of the Association or Editors. Letters to the
Editor are encouraged and welcome, and should
be sent to the Illinois Association of Defense Trial
Counsel headquarters in Rochester, Illinois.
69
IDC New Members
53
Insurance Law Update, by Patrick D. Cloud
28
Medical Malpractice Update, by Dina L. Torrisi and Zeke N. Katz
Editors reserve the right to publish and edit all such
letters received and to reply to them. IDC Quarterly,
Third Quarter 2015, Volume 25, No. 3., Copyright
© 2015 The Illinois Association of Defense Trial
Counsel. All rights reserved. Reproduction in whole
or in part without permission is prohibited.
6
35
Property Insurance Law, by Catherine A. Cooke
38
Recent Decisions, by Stacy E. Crabtree
THE ILLINOIS ASSOCIATION OF DEFENSE TRIAL
COUNSEL • P.O. Box 588 • Rochester, IL 62563-0588
800-232-0169 • 217-498-2649 • FAX 866-230-4415
[email protected] • www.iadtc.org
49
Workers’ Compensation Report, by Bradford J. Peterson
55
Young Lawyer Division, by Gregory W. Odom
President’s Message, by Troy A. Bozarth
SANDRA J. WULF, CAE, IOM, Executive Director
Third Quarter 2015 | IDC QUARTERLY | 1
2015-2016
OFFICERS and DIRECTORS
President
TROY A. BOZARTH
HeplerBroom LLC
Edwardsville
President-Elect
R. MARK MIFFLIN
Giffin, Winning, Cohen
& Bodewes, P.C.
Springfield
First Vice President
MICHAEL L. RESIS
SmithAmundsen LLC
Chicago
LAURA K. BEASLEY
JOSEPH A. BLEYER
BRUCE DORN
DONALD PATRICK ECKLER
Joley, Oliver & Beasley, P.C.
Belleville
Bruce Farrel Dorn & Associates
Chicago
Bleyer and Bleyer
Marion
Pretzel & Stouffer, Chartered
Chicago
2 | IDC QUARTERLY | Third Quarter 2015
Second Vice President
BRADLEY C.
NAHRSTADT
Lipe Lyons Murphy
Nahrstadt & Pontikis, Ltd.
Chicago
JEREMY T. BURTON
Lipe Lyons Murphy
Nahrstadt & Pontikis, Ltd.
Chicago
JOSEPH G. FEEHAN
Heyl, Royster, Voelker &
Allen, P.C.
Peoria
Secretary/Treasurer
WILLIAM K. McVISK
Johnson & Bell, Ltd.
Chicago
R. MARK COSIMINI
Rusin & Maciorowski, Ltd.
Champaign
TERRY A. FOX
Kelley Kronenberg
Chicago
EDWARD K. GRASSÈ
NICOLE D. MILOS
Busse, Busse & Grassé, P.C.
Chicago
Cremer, Spina, Shaughnessy,
Jansen & Siegert LLC
Chicago
JENNIFER K. GUST
DONALD J. O’MEARA, JR.
Resolute Management, Inc.
Chicago
STEPHEN G. LOVERDE
Law Office of Steven A. Lihosit
Chicago
PAUL R. LYNCH
Craig & Craig, LLC
Mt. Vernon
PATRICK W. STUFFLEBEAM
HeplerBroom LLC
Edwardsville
MICHELLE M. WAHL
Pretzel & Stouffer, Chartered
Chicago
Swanson, Martin & Bell, LLP
Chicago
SCOTT D. STEPHENSON
SANDRA J. WULF, CAE, IOM
Litchfield Cavo LLP
Chicago
IDC Executive Director
Rochester
TRACY E. STEVENSON
Robbins Salomon & Pratt, Ltd.
Chicago
2015-2016
COMMITTEE CHAIRS and
VICE CHAIRS
Amicus Committee
Craig L. Unrath, Chair
309-676-0400
[email protected]
John F. Watson, Vice Chair
Craig & Craig, LLC, Mattoon
217-234-6481
[email protected]
Civil Practice Committee
Adam C. Carter, Chair
Cray Huber Horstman Heil &
VanAusdal LLC, Chicago
312-332-8505
[email protected]
Donald Patrick Eckler, Vice Chair
312-346-1972
[email protected]
Commercial Law Committee
John J. O’Malley, Chair
Seyfarth Shaw LLP, Chicago
312-460-5514
[email protected]
David G. Wix, Vice Chair
Tarpey Wix, LLC, Chicago
312-948-9090
[email protected]
CONSTRUCTION LAW COMMITTEE
Mark J. McClenathan, Chair
Heyl, Royster, Voelker & Allen, P.C., Rockford
815-978-4773
[email protected]
Cecil E. Porter, Vice Chair
Litchfield Cavo LLP, Chicago
312-781-6677
[email protected]
Employment Law Committee
Denise Baker-Seal, Chair
Brown & James, P.C., Belleville
618-235-5590
[email protected]
James L. Craney, Vice Chair
Lewis Brisbois Bisgaard & Smith LLP
Edwardsville
618-307-7289
[email protected]
Events Committee
Jeremy T. Burton, Chair
Pontikus, Ltd., Chicago
312-448-6230
[email protected]
Gregory W. Odom, Chair
618-656-0184
[email protected]
Insurance Law Committee
John D. Hackett, Chair
Cassiday Schade LLP, Chicago
312-641-3100
[email protected]
William K. McVisk, Vice Chair
312-372-0770
[email protected]
Legislative Committee
R. Mark Cosimini, Chair
Rusin & Maciorowski, Ltd., Champaign
217-351-1700
[email protected]
Donald Patrick Eckler, Vice Chair
312-346-1972
[email protected]
Local Government Law Committee
John O’Driscoll, Chair
Tressler LLP, Chicago
312-627-4000
[email protected]
Membership Committee
Patrick W. Stufflebeam, Chair
618-656-0184
[email protected]
Tort Law Committee
N. Drew Kemp, Chair
Thompson Coburn, LLP, Belleville
618-277-4700
[email protected]
Erica S. Longfield, Vice Chair
Swanson, Martin & Bell LLP, Chicago
312-222-8578
[email protected]
Young Lawyer Division
Elizabeth K. Barton, Chair
Ancel, Glink, Diamond, Bush, DiCianni &
Krafthefer, Chicago
312-782-7606
[email protected]
James DuChateau, Vice Chair
312-370-0770
[email protected]
Dustin S. Fisher, Vice Chair
Judge, James & Kujawa, LLC, Park Ridge
847-292-1200
[email protected]
President’s Message
Troy A. Bozarth
“The first thing we do, let’s kill all the lawyers.”
– Dick the Butcher1
Dick the Butcher’s plan to “kill all
the lawyers” in William Shakespeare’s
Henry VI, is thought of as an early lawyer
joke or a punch line to criticize the legal
system. Its true meaning, however, could
not be further from the truth. Looking
at this quote in context paints a much
different picture. Dick the Butcher was
Jack Cade’s murderous henchmen. Dick
the Butcher’s only interest was his and
Cade’s rise to power. Jack Cade wanted
to be an autocrat and Dick intends to
help. Dick the Butcher despises the law
because it constrains him and puts him
on equal footing with others he wishes
to subjugate. Thus, Dick seeks to gain
power outside the bounds of the law.
His plan—to build power and destabilize
society—first required that someone had
to “kill all the lawyers” because lawyers
were the guardians of the legal system,
society’s safety net.
This oft repeated quote is actually
a backhanded compliment of lawyers.
It is a telling social comment on the
importance of equal justice to a civil
society and a lawyer’s role in the system.
Indeed, this misunderstood line from an
old play speaks volumes of a society’s
need for the rule of law and, yes, lawyers
to champion the legal system. The sentiment could not be truer today. The IDC
embraces this role.
1
For 50 years the IDC has been fighting for the ideals that make a good legal
system that was so despised by Dick the
Butcher. Our Core Values clearly spell
out these ideals:
— To promote and support a fair,
unbiased and independent judiciary;
— To take positions on issues of
significance to our membership,
and to advocate and publicize those
positions;
— To promote and support the fair,
expeditious and equitable resolution
of disputes, including the preservation and improvement of the jury
system;
— To provide programs and opportunities for professional development
to assist members in better serving
their clients;
— To increase its role as the voice of the
defense bar in Illinois, and make the
IDC more relevant to its members
and the general public; and
— To support diversity within our
organization, the defense bar and the
legal profession.
William Shakespeare, Henry VI, Part 2, Act 4, Scene 2
These Core Values guide our organization and its leaders. In step with these
principles, the IDC has been unwavering
in its advocacy for a better and fairer justice system for everyone - not just a few.
Each of these values serves to strengthen
and better the legal system as a whole,
and not just the IDC. Indeed, a conscious
by-product of the IDC’s vigilant work to
improve the legal system is a better and
stronger society for all.
The IDC started as a group of
like-minded defense lawyers looking to
share ideas, learn from one another, and
promote the civil defense trial bar. That
simple ideal has accomplished much
more than its founders imagined. In fact,
when the Core Values were drafted, they
were as much a historical record of what
the IDC had already been doing and
already stood for, as they were a guide for
the future. The Core Values were meant
to preserve where we had been and what
we had done and keep our future course
true. They were not a new direction of
the IDC, they were a recognition of the
IDC’s existing and chosen path.
Over the past 50 years the IDC has
not only helped shape Illinois’ defense
trial bar, it has influenced law and policy
throughout Illinois and the United States,
for that matter. A key distinction between
the IDC and other organizations that
similarly seek to influence law and policy
is that the IDC does not seek to change
the civil justice system to enrich itself,
its members, or its members’ clients.
Rather, the IDC seeks to level the field
and make the system better for everyone.
As IDC members we can all be proud of
this goal, what we have accomplished,
and the good fight that lies ahead.
The IDC advocates on behalf of
the civil justice system through the
legislature, the courts, and by educating
its members. In the General Assembly,
A key distinction between the IDC and other
organizations that similarly seek to influence law and
policy is that the IDC does not seek to change the
civil justice system to enrich itself, its members, or its
members’ clients. Rather, the IDC seeks to level the
field and make the system better for everyone.
the IDC provides position papers and fact
sheets on the impact that pending legislation has on the civil justice system. IDC’s
members also provide expert testimony
to legislative committees and political
leaders who are considering pending or
proposing legislation. The IDC promotes
legislation that would strengthen and
improve the civil justice system, like
the recent House Bill 3852 that sought
to level the inequities in determining
the contributory fault of a plaintiff as
compared to that of a defendant. The
IDC will continue to press for a better
and fairer statutory scheme. The IDC is
an active voice of reason in Springfield
where it continuously pushes for a fair
and unbiased legal system for everyone. In the appellate court, the IDC has
prepared amicus curiae briefs on the
pivotal legal issues of the past 50 years.
In doing so, the IDC gives a voice for
a perspective that is often lost—the
betterment of the civil justice system as
a whole.
Through education, the IDC has
armed members of the defense bar with
the means to protect and fight for an
unbiased court system. The IDC provides
the best seminars and legal education,
bar none, and was doing so before it
became the rage. Our members continue
to assist each other through our various
publications, The IDC Quarterly, the
annual Survey of Law, and the multiple
committee newsletters, position papers,
and legal alerts. Making our members
better lawyers through education has had
a profound impact on the legal system in
Illinois and created the best defense trial
attorneys in the state.
We are in the midst of a volatile
and pivotal time. Lawyers have a great
opportunity to assist our society in
healing. To be sure, a group of Illinois
civil defense lawyers will not cure all of
society’s ills but our ability to help cannot
be overstated. What makes our nation
strong is the rule of law and the promise
of equal justice for all. As lawyers, we
are both the keepers of the rule of law
and its ambassadors. We must constantly
strive to ensure that our legal system is
the force for societal good that it was
intended to be.
It is this fair and unbiased legal
system that is the bedrock of our society
and what the IDC strives to preserve and
protect. It is this mission that inspired
the sentiment of Dick the Butcher in the
Shakespearian line “kill all the lawyers.”
Without the protectors of a free and fair
legal system society is doomed to be
corrupted by those that seek to slant the
system in their favor. Sadly, all too often
that is what we see today under the guise
of “justice.”
If everyone perceives that there is a
fair and accessible forum for grievances
to be resolved, there is no need to take to
the streets or to take business to another
state. But a society’s view of the legal
system is often shaped by discrete or
singular experiences. The challenge for
the IDC and its members in the next 50
years is not only strive to ensure that the
civil justice system is fair for all but, to be
its champions. Our legal system despite
its flaws is still the best legal system ever
created. When our civil justice system is
both perceived as fair, and actually is fair,
it will be living up to the intended vision of our nation’s founders.
On behalf of the IDC, I would like to
thank and congratulate my friend, David
Levitt, on his great year as president.
I would also like to thank my fellow
officers and board members for their
service to the organization. I am very
proud of the IDC, its accomplishments,
goals and bright future. My hope for my
term as president is that I am able to live
up to the high standards of my friends
and mentors who have gone before me.
Without the protectors of a free and fair legal system
society is doomed to be corrupted by those that seek
to slant the system in their favor. Sadly, all too often
that is what we see today under the guise of “justice.”
Editor’s Note
Brad A. Elward
It is with great pride and a huge dose
of humility that I assume the role of the
IDC Quarterly Editor-in-Chief. Indeed,
it was roughly 14 years ago when I was
asked to author the Appellate Practice
Corner, and approximately six years
ago that I became an Assistant Editor.
How fast time passes! Over my several
years of affiliation with the Quarterly,
I have had the pleasure of working with
a number of outstanding Editors-in-Chief
who have set the bar very high for their
successors. Hopefully, I can continue to
deliver to you the high quality publication you have become accustomed to and
now expect from the IDC.
As we begin a new fiscal year, The
IDC Quarterly editorial staff welcomes
Catherine A. Cooke, of Robbins, Salomon & Patt, Ltd, Chicago, as an Assistant
Editor. Catherine currently writes the
Property Insurance Column. This new
year also brings two new columnists
into the Quarterly: Gretchen Sperry of
Hinshaw & Culbertson LLP, Chicago,
will author the Legal Ethics column; and
Patrick W. Stufflebeam of HeplerBroom
LLC, Edwardsville, will author the
E-Discovery column. Look for their
articles in our next issue.
I want to thank Beth A. Bauer, our
outgoing Quarterly Editor-in-Chief, who
did a terrific job with the publication
over this past year. Beth’s vision and
attention to detail helped ensure that
the Quarterly remained an outstanding
legal publication. Beth is a consummate
professional, an excellent lawyer, and a
true friend.
Our Monograph for this issue concerns insurance law and is written by
John D. Hackett and Jamie Hull of
Cassiday Schade LLP, Seth D. Lamden
of Neal, Gerber & Eisenberg, LLP, and
Mollie Werwas and Daniel J. Berkowitz
of Kopon Airdo LLC. This article discusses the standard for determining the
duty to defend under a liability insurance
policy where the parties want the court
to look outside the four corners of the
underlying complaint to find coverage.
It further addresses the history and use
of extrinsic evidence and the “true but
unpleaded facts” doctrine in the duty to
defend analysis. The Monograph also
includes practical considerations and tips
for practitioners about when evidence
outside the four corners of the underlying complaint can be used to trigger or
negate the duty to defend under a liability
insurance policy. Additionally, we have two feature
articles. First, Aimee K. Lipkis of Cray
Huber Horstman Heil & VanAusdal
LLC, provides a nice discussion of the
respondent-in-discovery statute and how
it is being abused through the unfettered
use of extensions of time to convert the
respondent-in-discovery into a named
defendant, and further highlights proposed legislation which might weaken
the protections afforded physicians
under the current version of the statute.
Our second feature article, authored
by Donald Patrick Eckler and Mary H.
Cronin of Pretzel & Stouffer, Chartered,
discusses the burden of proof regarding
a claim of discrimination under the
Pregnancy Discrimination Act after the
United States Supreme Court’s decision
in Young v. UPS.
In this issue our columns continue
our quest to provide you with up-tothe-minute case and substantive law
reports to help you in your respective
practices. Writing in our Commercial
Column, James K. Borcia of Tressler
LLP, writes about raising scrutiny on
class action settlements, and discusses
several recent Seventh Circuit decisions
highlighting the growing influence of
the Federal Judicial Center’s notice and
claims process checklist. Borcia explains
that the checklist is a guidebook to help
judges navigate class action notice and
settlement administration issues, and
notes it has been cited and relied on with
increasing frequency by courts across
the country. In Recent Decisions, Stacy
E. Crabtree of Heyl, Royster, Voelker
& Allen, P.C., reports on two interesting procedural cases. In one case, the
court considered the extent and scope
of authority afforded to a city council
committee regarding settlement of a
personal injury action. The second case
discusses whether a motion for leave to
amend a complaint serves as the “commencement” of an action for the purposes
of the statute of limitations.
Scott L. Howie of Pretzel & Stouffer,
Chartered, discusses the public-interest
exception to the mootness doctrine as
part of his Appellate Practice Corner
and offers tips as to when it may or may
not apply. In the Medical Malpractice
Update, Dina L. Torrisi and Zeke N.
Katz of HeplerBroom LLC, discuss the
physicians’ staff privilege and the tools
available to keep such files exempt from
discovery, and talk about the Klaine v.
Southern Illinois Hosp. Services case
presently pending before the Illinois
Supreme Court. In his Civil Rights
Update, Bradford J. Ingram of Heyl,
Royster, Voelker & Allen, P.C. writes
about three recent civil rights cases, including the recent United States Supreme
Court decision in City and County of San
Francisco v. Sheehan, which addressed
whether law enforcement officers have a
duty to accommodate an armed, violent
and mentally ill suspect in the course of
trying to bring the suspect into custody. In our Construction Law Column,
Lindsay Drecoll Brown and John J.
Vitanovec of Cassiday Schade LLP,
provide an excellent overview of the
Employee Classification Act and its
potential impact on construction industry
employees as respecting independent
contractors. The Act addressed employee
misclassification and imposes some
significant fines for violations.
Joseph G. Feehan and Brad W.
Keller, of Heyl, Royster, Voelker & Allen,
P.C., in their Evidence and Practice Tips
Column, analyze the Appellate Court,
Third District, decision in Calabrese
v. Benitez, which outlines the steps
necessary to preserve issues dealing with
evidentiary error for appeal. On issue,
the court found that the defendant had
waived its right of review of an error
by failing to raise a contemporaneous
objection at trial, despite the defendant
having filed a motion in limine seeking
admission of the evidence. In the Civil Practice and Procedure
Column, Donald Patrick Eckler and
Kelly A. Kono of Pretzel & Stouffer,
Chartered, discuss three recent Illinois
Supreme Court decisions decided this
past March, all involving privileges and
professionals. The cases deal with the
accountant-client privilege, the selfcritical analysis privilege, and the duties
of captive insurance agents.
Bradford J. Peterson of Heyl, Royster, Voelker & Allen, P.C.,’s Workers’
Compensation Update reports on a recent
Appellate Court, Workers’ Compensation Commission Division, decision
that permits the recovery of permanent
partial disability benefits on behalf of the
decedent’s estate, despite the fact that
there are no dependents.
Catherine A. Cooke of Robbins, Salomon & Patt, Ltd, in her Property Insurance Law article, discusses a late 2014
Seventh Circuit Court of Appeals decision that considers the completed work
exclusion in a condominium board’s suit
against a developer for faulty construction work.
In the Health Law Column, Roger
R. Clayton, Gregory J. Rastatter, and J.
Matthew Thompson, of Heyl, Royster,
Voelker & Allen, P.C. provide an analysis
of the supreme court’s recent decision in
McVey v. M.L.K. Enterprise, which held
that attorneys’ fees and costs should not
be deducted before calculating amounts
recoverable under the Health Care
Services Lien Act.
Writing in the Insurance Law Column, Patrick D. Cloud of Heyl, Royster,
Voelker & Allen, P.C., provides an
overview of recent limitations on the
targeted tender doctrine, which permits
an insured covered by multiple policies
to select or “target” which insured he
wants to defend and indemnify him
regarding a specific claim. Finally, in
the Young Lawyers Division Report,
Gregory W. Odom, HeplerBroom LLC,
provides an interesting summary of the
Young Lawyers Division’s Law Day
2015 activities, which included assisting
fifth grade students with a mock trial at
a Belleville school.
I look forward to these next twelve
months as Editor-in-Chief and I welcome
your suggestions as to how we can
continue to make The IDC Quarterly a
valued publication.
Feature Article
Donald Patrick Eckler and Mary H. Cronin
Carrying the Burden of Proving a
Claim of Discrimination Under the
Pregnancy Discrimination Act following
the Supreme Court’s Decision
in Young v. UPS
According to the United States
Department of Labor’s latest annual
data, the 2013 labor force included 72.7
million women. U.S. Dept. of Labor,
Latest Annual Data (2013), available
at www.dol.gov/wb/stats/recentfacts.
htm (last visited June 2, 2015). Between
2012 and 2022, it is anticipated that this
number will increase by 5.4 percent.
Id. The Department of Labor does not
provide statics regarding the number of
women in childbearing age who work;
however, according to its website, 69.9
percent of mothers with children under
the age of 18 years are in the workforce.
Id. As the number of women in the
workforce rises so too has the number
of gender-based discrimination lawsuits.
In 1978, Congress passed the Pregnancy
Discrimination Act, which amended
Title VII of the Civil Rights Act and
expanded gender-based discrimination
to include discrimination “on the basis of
pregnancy, childbirth, or related medical
conditions.” Pregnancy Discrimination
Act, 42 U.S.C. § 2000e(k).
On March 25, 2015, the United
States Supreme Court issued its longawaited decision in the Pregnancy Discrimination Act case of Young v. United
Parcel Service, 135 S. Ct. 1338, 1344
(2015). It is important, as the number
of women in the workforce continues
to grow, for employers throughout the
country to be aware of the implications
of the Supreme Court’s decision. For
practitioners, it is likely that we will see
further development of the application
of the Pregnancy Discrimination Act to
Title VII lawsuits in the future.
Background Facts
The background of the Young case is
not entirely unique. In 2006, while working as a part-time driver for UPS, Peggy
Young became pregnant after suffering
several miscarriages. Due to her medical
history, Young’s doctor recommended
that she not lift anything heavier than
20 pounds during the first 20 weeks of
her pregnancy or 10 pounds thereafter.
Young, 135 S. Ct. at 1344. At the time,
Young’s job required her to lift packages weighing up to 70 pounds without
assistance and up to 150 pounds with
assistance. Id. Despite Young’s doctor’s
orders and other UPS employees offers
to assist Young, UPS told Young that they
could not accommodate her request not
to be required to lift anything over 20
pounds. Id. As a result, Young stayed
home without pay and lost her employee
medical coverage during most of the time
she was pregnant. Id.
Young sued UPS in federal court
alleging that UPS “acted unlawfully
in refusing to accommodate Young’s
pregnancy-related lifting restriction.”
Id. Young argued that UPS should be
required to accommodate her work
restriction as UPS had accommodated
other drivers who were “similar in their
ability to work.” Id. In response, UPS
argued that it had not discriminated
against Young because the other drivers
who UPS accommodated were: “(1) drivers who had become disabled on the job,
(2) those who had lost their Department
of Transportation (DOT) certification,
and (3) those who suffered from a disability covered by the Americans with
About the Authors
Donald Patrick Eckler
is a partner at Pretzel &
Stouffer, Chartered. He
practices in both Illinois
and Indiana in the areas
of commercial litigation,
professional malpractice
defense, tort defense, and
insurance coverage. Mr.
Eckler earned his undergraduate degree from the University of Chicago
and his law degree from the University of Florida.
He is a member of the Illinois Association of
Defense Trial Counsel, the Risk Management
Association, and the Chicago Bar Association.
He is the co-chair of the CBA YLS Tort Litigation
Committee. The views expressed in his article
are his, and do not reflect those of his firm or
its clients.
Mary H. Cronin is a trial
attorney with Pretzel &
Stouffer, Chartered and
has experience in employment discrimination,
professional liability, aviation litigation and high-risk,
national-scope mass tort
and multidistrict litigation.
Ms. Cronin has first-chaired and second-chaired
cases at trial and participated in arbitrations
pursuant to AAA rules. Ms. Cronin was part of
a team that recently obtained a $30,000,000
arbitration award for contribution and indemnity against a manufacturer of an aerosol grout
sealer that injured 200 plaintiffs throughout the
country.
Disabilities Act of 1990 (ADA).” Id.
Therefore, UPS treated Young “just as
it treated all ‘other’ relevant ‘persons,’
not on the basis of Young’s pregnancy.”
Id. Notably, the Americans with Disabilities Act was amended subsequent
to Young’s pregnancy in 2008 specifying
that “‘physical or mental impairment[s]
that substantially limi[t]’ an individual’s
ability to lift, stand, or bend are ADAcovered disabilities.” Id. at 1348.
The Majority’s Analysis
Under Title VII of the Civil Rights
Act, an employer may not “discriminate
against any individual with respect to . .
. terms, conditions, or privileges of employment, because of such individual’s
. . . sex.” Id. (citing 78 Stat. 253, 42
U.S.C. § 2000e-2(a)(1)). The Pregnancy
Discrimination Act extended the prohibition of discrimination on the basis of
sex to include “because of or on the
basis of pregnancy, childbirth, or related
medical conditions.” Young, 135 S. Ct.
at 1344-45 (citing 42 U.S.C. §2000e(k)).
The Supreme Court analyzed Young’s
“disparate-treatment” claim that UPS
intentionally treated Young less favorably than employees with Young’s qualifications but outside Young’s protected
class. Id. The Supreme Court noted that
“[l]iability in a disparate-treatment
case depends on whether the protected
trait actually motivated the employer’s
decision.” Id. The key analysis of the
Supreme Court’s opinion was the second
clause of the Pregnancy Discrimination
Act, which provides:
women affected by pregnancy,
childbirth, or related medical
conditions shall be treated the
same for all employment-related
purposes . . . as other persons not
so affected but similar in their
ability or inability to work . . .
Id. at 1345. The language within this
second clause of the Act that required
the most analysis is the portion that
states “as other persons not so affected
but similar in their ability or inability to
work.” Id. at 1348-49 (citing 42 U.S.C.
§ 2000e(k)) (emphasis added by the
Court). It is unclear whom Congress
included among these “other persons.”
Id. The Supreme Court, in reliance on
petitioner’s reply brief, stated that the
analysis of this clause boils down to
whether the Act requires “giving ‘the
same accommodations to an employee
with a pregnancy-related work limitation
as it would give that employee if her
work limitation stemmed from a different
cause but had a similar effect on her
inability to work.’” Id. at 1349 (citing
the Petitioner’s Reply Brief) (emphasis
in original).
The petitioner and the United States
argued that the second clause “requires
an employer to provide the same accommodations to work-place disabilities
caused by pregnancy that it provides
to workplace disabilities that have
other causes but have a similar effect
on the ability to work.” Id. at 1349. The
Supreme Court found that the respondent
minimized the implications of the
second clause taking the position that the
language was intended to merely “define
sex discrimination to include pregnancy
discrimination.” Id. This interpretation
would require the courts in determining
whether an employer violated Title VII
to analyze “the accommodations an
employer provides to pregnant women
with the accommodations it provides to
others within a facially neutral category.”
Id. (citing dissent of Scalia, J.) (emphasis
in original). The majority of the Supreme
Court declined to accept either interpretation. Id.
The Supreme Court found the
petitioner’s literal interpretation too
broad. Id. Under the petitioner’s approach, if “an employer accommodates
only a subset of workers with disabling
conditions,” then “pregnant workers
who are similar in the ability to work
[must] receive the same treatment even
if still other non-pregnant workers
do not receive accommodations.” Id.
Petitioner argues that respondent violated
the statute because pregnant workers and
non-pregnant workers were not treated
the same. Id. The Supreme Court found
this approach to be problematic because
it requires employers to give all pregnant
workers the same accommodations that
the employer may provide even one or
two workers irrespective of any factor
considered in providing an accommodation for a non-pregnant worker, such as
the worker’s age or the nature of their
job. Id.
Justice Breyer, who drafted the
majority opinion, agreed with the respondent that petitioner’s approach would
grant pregnant workers an unconditional
“most-favored-nation” status. Id. at
1349-50. The Supreme Court noted
that the second clause does not provide
that an employer must treat pregnant
workers as “any other persons.” Id. at
1350 (emphasis in original). In addition,
disparate-treatment claims generally may
be overcome by proof that an employer’s
policy may have an unfavorable affect
on a protected class, but an employer
has “a legitimate, non-discriminatory,
non-pretextual reason” for the policy. Id.
The history of the Act does not indicate
that Congress intended any deviation
from this approach generally taken in
disparate treatment cases. Id.
— Continued on next page
Feature Article | continued
The Court found that while pregnancy was
“confined to women,” it was not “comparable in all
other respects to [the] diseases or disabilities’ that
the plan covered.” The Court also did not consider
pregnancy a disease or a result of an accident.
In addition, the Court did not believe that the purpose
for the distinction was gender-based discrimination.
The Supreme Court stated that the
Equal Employment Opportunity Commission (EEOC) issued guidance prior
to and following Congress passing the
Pregnancy Discrimination Act by stating
that a disability caused by or contributed
to by pregnancy is considered a temporary disability and should be treated the
same in terms of benefits and privileges
as they are applied to other temporary
disabilities. Id. at 1351. The EEOC also
stated that “[i]f other employees temporarily unable to lift are relieved of these
functions, pregnant employees also unable to lift must be temporarily relieved
of the function.” Id. The Supreme Court
found that the EEOC’s guidance did not
clarify the ambiguous language of “other
persons” set forth in the second clause of
the Act. Id. The Supreme Court wrangled
with the notion that while it is clear that
pregnancy related disabilities should
be treated the same as non-pregnancy
related disabilities, this does not clarify
what an employer is required to do when
it does not treat all non-pregnancy related
disabilities the same. Id.
The majority discussed another
landmark gender-based discrimination
case, General Electric Company v. Gilbert. Id. at 1353 (citing General Electric
Co. v. Gilbert, 429 U.S. 125 (1976)). In
Gilbert, the Supreme Court evaluated
whether a company policy that gave
“‘nonoccupational sickness and accident
benefits to all employees’ without providing ‘disability-benefit payments for any
absence due to pregnancy.’” Young, 135
S. Ct. at 1353 (citing Gilbert, 429 U.S.
125 at 128-29). In Gilbert, the Supreme
Court held that this policy did not constitute sexual discrimination under Title VII
because the policy distinguished between
pregnant workers versus non-pregnant
workers, not men versus women. Young,
135 S. Ct. at 1353. The Court found
that while pregnancy was “confined to
women,” it was not “comparable in all
other respects to [the] diseases or disabilities’ that the plan covered.” Id. The
Court also did not consider pregnancy
a disease or a result of an accident. Id.
In addition, the Court did not believe
that the purpose for the distinction was
gender-based discrimination. Id.
Scalia’s Dissent
In the dissenting opinion written by
Justice Scalia, and joined by Justices
Kennedy and Thomas, he argued that he
was advocating adoption of the position
set forth in Gilbert, acknowledging that
the Pregnancy Discrimination Act overturned the Gilbert decision. Id. at 1364.
However, Justice Scalia argued that
the plan in Gilbert is different than the
alleged discrimination in this case
because the Gilbert plan specifically
singled out pregnancy for disfavor. Id.
Justice Scalia stated that the employment
plan at issue in Gilbert was not a neutral
plan, but rather “place[d]...pregnancy in
a class by itself.” Id. The plan specifically denied coverage for sicknesses on
account of pregnancy but not on account
of other conditions such as “sports injuries” or “elective cosmetic surgeries.” Id.
Justice Scalia stated that “[t]he most
natural way to understand the sametreatment clause is that an employer
may not distinguish between pregnant
women and others of similar ability and
inability because of pregnancy.” Id. at
1362 (emphasis in original). Justice
Scalia explained that “[i]f a pregnant
woman is denied an accommodation
under a policy that does not discriminate against pregnancy, she has been
‘treated the same’ as everyone else.” Id.
Employing a satirical approach, Justice
Scalia claimed that the majority used a
wand to reach the result that it desired
result without offering a sufficient
explanation for the result. Id. at 1364.
Justice Scalia argued that the words in
the second clause “shall be treated the
same” does not mean that the courts
have to balance “the significance of the
burden on pregnant workers against the
strength of the employer’s justifications
for the policy.” Id.
Justice Scalia also criticized the majority’s opinion for failing to distinguish
disparate treatment claims (one in which
an employment policy is based upon a
“discriminatory motive”) from a discriminatory impact case (where the effect
of a policy harms one group more than
another without justification). Id. at 1365.
The majority noted early in its opinion
that petitioner had not brought a disparate
impact claim. Id. at 1345. Justice Scalia
argued that the majority’s decision allows
a pregnant woman to establish disparate
treatment by showing that the effects of
the employers’ policy fall more harshly
on pregnant women than others and are
unjustified. Justice Scalia found this
result problematic because these two
different types of claims come with
different standards of liability, different
defenses, and different remedies. Id. at
1365. For instance, a plaintiff can be
awarded compensatory and punitive
damages in a disparate treatment case,
but only equitable relief in a disparate
impact case. Id.
The Supreme Court majority found
that the dissenting opinion, as well as the
position espoused by UPS relying on the
Gilbert decision, failed to acknowledge
that the purpose of the Pregnancy
Discrimination Act was to overturn the
Court’s ruling in Gilbert as well as its
rationale. Id. at 1353.
Conclusion
In establishing the burden of proof in
a Pregnancy Discrimination Act case, the
Supreme Court applied the framework
from the discriminatory hiring case of
McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1973). Id. at 1353-54. The
Supreme Court held that the elements
of a cause of action under the second
clause of the Pregnancy Discrimination
Act include: (1) plaintiff belongs to
a protected class; (2) plaintiff sought
accommodation; (3) the employer did
not accommodate plaintiff; and (4)
the employer accommodated others
“similarly in their ability or inability to
work.” Id. at 1354. If plaintiff makes
out a prima facie case, then the burden
of proof shifts to the defendant to
show that its refusal to accommodate
plaintiff was based upon “legitimate,
non-discriminatory” reasons. Id. These
reasons cannot include “that it was more
expensive or less convenient to add
pregnant women” to add the pregnant
women to the group of people that the
employer accommodates. Id.
The analysis does not end here. If
a defendant offers a “legitimate, nondiscriminatory reasons,” plaintiff avoids
summary judgment by showing that “the
employers ‘legitimate, non-discriminatory’ reasons are not sufficiently strong
to justify the burden, but rather—when
considered along with the burden imposed—give[s] rise to an inference of
intentional discrimination.” Id.
UPS has numerous policies that accommodate non-pregnant employees with
lifting restrictions that its reasons for not
offering accommodations to pregnant
employees is not strong. Id.
While pregnant workers, in Justice
Breyer’s words, did not receive a “most
favored nation” status (by allowing a
plaintiff to argue that she should receive
a work accommodation that was offered
to “any” other worker), the Supreme
Court has provided a ground for workers
like Peggy Young to recover against
their employers. Future cases and court
opinions will likely resolve several
factors yet to be decided potentially including (1) who comprises this group
The Supreme Court majority found that the dissenting
opinion, as well as the position espoused by UPS
relying on the Gilbert decision, failed to acknowledge
that the purpose of the Pregnancy Discrimination
Act was to overturn the Court’s ruling in
Gilbert as well as its rationale.
The Supreme Court noted that a
plaintiff could argue that a genuine
issue of material fact exists when the
employer accommodates a large portion
of non-pregnant workers, but not a large
percentage of non-pregnant workers. Id.
at 1354-55. Young claimed that she could
prove that UPS accommodated most
non-pregnant employees with lifting
restrictions and categorically denied
these accommodations to pregnant
employees with lifting restrictions. Id.
at 1355. The Supreme Court noted that
Young could also argue an inference of
intentional discrimination exists because
of people “similarly in their ability or
inability to work;” (2) what consists of a
“legitimate, non-discriminatory reason”
to not accommodate a pregnant worker;
and (3) how will a plaintiff prove that
an employer’s purported “legitimate,
non-discriminatory” reason is not sufficiently strong to justify the burden. In
the meantime, employers should adjust
their policies to account for the standard
annunciated by the Court and the 2008
amendment to the ADA which specifically includes pregnancy as a disability.
Health Law Update
Roger R. Clayton, Gregory J. Rastatter and J. Matthew Thompson
Illinois Supreme Court:
Attorney Fees and Costs Should Not
Be Deducted Before Calculating
Amounts Recoverable Under the
Health Care Services Lien Act
When a plaintiff has settled a personal injury lawsuit and it comes time
to adjudicate health care liens, many
physicians, clinics and hospitals entitled
to recover simply do not show up for
the hearing, thereby waiving their
liens. Likely, the health care providers
simply feel that hiring a lawyer or having
someone appear on their behalf is not
worth the time and expense. However,
the health care providers may be missing out on significant sums of money,
especially over the long term. And, the
Illinois Supreme Court recently issued an
opinion that could increase the amount
a trial court must award to lienholders,
making it even more desirable for health
care providers to pursue the liens.
In McVey v. M.L.K. Enterprises,
L.L.C., the supreme court was asked
to determine whether attorney fees and
costs must be deducted from a verdict
or settlement before calculating the
amount available to satisfy health care
liens under the Health Care Services
Lien Act (the Act). 2015 IL 118143,
¶ 1. The importance of the issue to the
industry is demonstrated by the entities
filing friend of the court briefs on behalf
of the appellant hospital, including the
Illinois State Medical Society, Illinois
Hospital Association, Illinois Chiropractic Society, Cook County, and OSF
Healthcare System. See McVey, 2015 IL
118143, ¶ 8. In finding that attorney fees
and costs should not be deducted before
calculating health care liens, the supreme
court effectively increased the amount of
money that may be available to satisfy
such liens. Id. ¶ 1.
Health Care Services Lien Act
The Act creates liens for health care
providers and professionals providing
services to injured patients and sets
forth a statutory scheme for calculating the amount of the liens. 770 ILCS
23/10. Section 10 of the Act provides,
in relevant part:
(a) Every health care professional and health care provider
that renders any service in the
treatment, care, or maintenance of an injured person
. . . shall have a lien upon
all claims and causes of action of the injured person for
the amount of the health care
professional’s or health care
provider’s reasonable charges
up to the date of payment of
damages to the injured person.
The total amount of all liens
under this Act, however, shall
About the Authors
Roger R. Clayton is a
partner in the Peoria office
of Heyl, Royster, Voelker
& Allen, P.C., 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 Illinois Association of Defense
Trial Counsel (IDC), the Illinois State Bar Association, past president of the Abraham Lincoln
Inn of Court, president and board member of the
Illinois Association of Healthcare Attorneys, and
past president and board member of the Illinois
Society of Healthcare Risk Management. He
co-authored the Chapter on Trials in the IICLE
Medical Malpractice Handbook.
Gregory J. Rastatter is a
of Heyl, Royster, Voel-ker
is a member of the firm’s
healthcare practice group.
His practice involves representing and advising hospitals on compliance issues, including drafting and analysis of hospital
and medical staff bylaws, physician and allied
health professional contracts, and other aspects
of health law for compliance with state and
federal law and Joint Commission standards.
He received his undergraduate degree from
Bradley University and a law degree from the
University of Illinois College of Law in 2003. Mr.
Rastatter is a member of the Peoria County Bar
Association, the Illinois State Bar Association,
and the American Bar Association.
J. Matthew Thompson is
an associate in the Peoria
office of Heyl, Royster,
Voelker & Allen, P.C. He
practices primarily in the
area of general tort defense. He received his
B.S. in Accounting from
Culver-Stockton College in 2005 and his J.D.
cum laude from Southern Illinois University
School of Law in 2008.
not exceed 40% of the verdict,
judgment, award, settlement,
or compromise secured by or
on behalf of the injured person
on his or her claim or right of
action.
***
(c) All health care professionals and health care providers
holding liens under this Act
with respect to a particular
injured person shall share proportionate amounts within the
statutory limitation set forth in
subsection (a). The statutory
limitations under this Section
may be waived or otherwise
reduced only by the lienholder.
No individual licensed category
of health care professional
(such as physicians) or health
care provider (such as hospitals) as set forth in Section 5,
however, may receive more
than one-third of the verdict,
or compromise secured by or
on behalf of the injured person
on his or her claim or right of
action. If the total amount of
all liens under this Act meets
or exceeds 40% of the verdict,
judgment, award, settlement, or
compromise, then:
(1) all the liens of health
care professionals shall not
exceed 20% of the verdict,
or compromise; and
(2) all the liens of health
care providers shall not
exceed 20% of the verdict,
judgment, award,
settlement, or compromise;
In finding that attorney fees and costs should not be
deducted before calculating health care liens, the
supreme court effectively increased the amount of
money that may be available to satisfy such liens.
provided, however, that health
care services liens shall be satisfied to the extent possible for all
health care professionals and
health care providers by reallocating the amount unused within
the aggregate total limitation of
40% for all health care services
liens under this Act; and provided further that the amounts of
liens under paragraphs (1) and
(2) are subject to the one-third
limitation under this subsection.
If the total amount of all liens
under this Act meets or exceeds
40% of the verdict, judgment,
award, settlement, or compromise, the total amount of all
the liens of attorneys under
the Attorney Lien Act shall
not exceed 30% of the verdict,
judgment, award, settlement, or
compromise.
770 ILCS 23/10 (a), (c) (emphasis
added). In McVey, the plaintiff contended
that calculating health care liens under
this statutory scheme should only be
done after subtracting attorney fees and
costs from the settlement, whereas the
lienholder contended the calculation
should be based upon the entirety of the
settlement. McVey, 2015 IL 118143, ¶ 10.
Background of
McVey v. M.L.K. Enterprises, L.L.C.
This case arose when a waitress at
the defendant restaurant dropped a tray
of drinks on the plaintiff’s foot, causing
the plaintiff’s personal injury. Id. ¶ 3.
The plaintiff received treatment for
her foot injuries at Memorial Hospital
of Carbondale (hospital or appellant).
Id. The plaintiff filed a lawsuit against
the defendant restaurant, which was
ultimately settled for $7,500.00. Id.
Thereafter, the plaintiff filed a petition
to adjudicate liens, and the parties
stipulated that the amount of hospital’s
lien was $2,891.64. Id. ¶ 4.
Upon hearing the petition, the
trial court determined that the amount
of the hospital’s lien should be reduced
to $2,500.00, because no individual
lienholder may receive more than onethird of the settlement under Section
10(c) of the Act. Id. ¶ 5, citing 770 ILCS
23/10(c). However, the trial court refused
to subtract attorney fees and costs before
calculating the amount due the hospital.
Id. ¶ 6.
The trial court was guided by the
plain language of the Act, along with the
supreme court’s decision in Wendling v.
Southern Illinois Hosp. Services, 242 Ill.
2d 261 (2011), which held that lienholders were not required to pay for the costs
of litigation to recover their lien. Id. The
Health Law Update | continued
trial court refused to follow the Appellate
Court Fifth District’s decision in Stanton
v. Rea, 2012 IL App (5th) 110187, which
held attorney fees and costs should be
deducted from the settlement or verdict
before calculating the amount of the lien,
because it conflicted with supreme court
precedent. Id. ¶ 6.
The appellate court reversed the trial
court, finding its prior decision in Stanton
should have been followed, and the trial
court should have deducted attorney fees
and costs before calculating the amount
payable to the hospital. McVey v. M.L.K.
Enterprises, L.L.C., 2014 IL App (5th)
130350-U, ¶ 11. The supreme court then
allowed the hospital’s petition for leave
to appeal. McVey, 2015 IL 118143, ¶ 8.
Health Care Liens are to be
Calculated Based Upon a Plaintiff’s
Total Recovery, Without Considering
Attorney Fees or Costs
The only issue before the supreme
court was whether the hospital’s lien
should be calculated based upon the
plaintiff’s total recovery, or whether attorney fees and costs should be deducted
before calculating the hospital’s lien.
Id. ¶ 10. In reaching its decision, the
supreme court was guided mostly by the
plain language of the statute, because
it is “the most reliable indication of
the legislature’s intent, and, when the
language is clear, it must be applied as
written without resort to aids or tools of
interpretation.” Id. ¶ 11, citing DeLuna
v. Burciaga, 223 Ill. 2d 49, 59 (2006).
With this principle in mind, the supreme
court found that health care liens must be
calculated based upon the plaintiff’s total
recovery because, “[s]imply put, there
is no language in section 10 that would
In Wendling v. Southern Illinois Hospital Services,
the supreme court reversed the lower courts’ ruling
that health care liens should be reduced by onethird to reflect the lienholders’ share of legal fees
under the common fund doctrine. On the contrary,
the Wendling court found that the lienholders were
not unjustly enriched by the attorneys’ services and
not required to contribute to the costs of litigation.
allow the calculation of a health care lien
to be based upon the total ‘verdict, judgment, award, settlement or compromise’
less attorney fees and costs.” Id. ¶ 14.
The supreme court also found its
own precedent and that of the appellate
court instructive, and in conflict with the
plaintiff’s proposed interpretation. Id.
¶¶ 15-18. In Wolf v. Toolie, the Appellate
Court, First District similarly found nothing in the Act allowing health care liens
to be calculated from the net amount of
the plaintiff’s recovery after deducting
attorney fees and costs. 2014 IL App (1st)
132243, ¶ 22. In Wendling v. Southern
Illinois Hospital Services, the supreme
court reversed the lower courts’ ruling
that health care liens should be reduced
by one-third to reflect the lienholders’
share of legal fees under the common
fund doctrine. 242 Ill. 2d 261, 270
(2011). On the contrary, the Wendling
court found that the lienholders were
not unjustly enriched by the attorneys’
services and not required to contribute
to the costs of litigation. Id. The McVey
court found that, here, the plaintiff was
similarly attempting to improperly shift
attorney fees and costs onto the hospital.
2015 IL 118143, ¶ 18.
The supreme court held that “the Act
is unambiguous and does not permit the
deduction of attorney fees and costs prior
to calculating the amount to be paid to
any health care lienholder.” Id. ¶ 19. In
so finding, the supreme court reversed the
appellate court and overruled Stanton v.
Rea, 2012 IL App (5th) 110187. Id.
Conclusion
The supreme court’s unanimous
decision is a clear win for those providing
health care services to patients suffering
personal injuries. Now, trial courts must
calculate the amount of a health care lien
based upon the plaintiff’s total recovery.
In many cases, this will result in the
recoverable amount being increased, and
health care providers should seriously
consider hiring an attorney or personally appearing at hearings on motions to
adjudicate liens in order to protect their
right to recovery.
Construction Law
Lindsay Drecoll Brown and John J. Vitanovec
Counting Contractors:
Why Construction Companies Shouldn’t
Gamble when it Comes to Classifying
Employees in Compliance with the ECA
A great number of construction industry employers have faced allegations
of employee misclassification; that is,
misidentifying workers as independent
contractors as opposed to employees in
order to avoid taxes and employment
regulations. Although many construction companies legitimately utilize the
services of independent contractors
in a legal manner to supplement their
workforce, the practice of intentionally
misidentifying workers has historically
plagued the construction industry in Illinois, where the problem of employee
misclassification is believed to be more
prevalent than in almost any other state
or industry. Michael Kelsay, James Sturgeon, Kelly Pinkham, “The Economic
Costs of Employee Misclassification in
the State of Illinois” (Dept of Economics: University of Missouri-Kansas
City: December 2006) at p. 5, 10. This
convention has harmed Illinois construction companies in a number of ways,
including creating an uneven playing
field for contractors who classify workers appropriately and find themselves
underbid by less scrupulous competitors.
Misclassification has also damaged the
state economy by creating a tremendous
tax deficit. In fact, misclassification
resulted in an estimated loss of $17.3
million in state income taxes from the
construction sector in the year 2005
alone. Id. at p. 7.
In an effort to remedy, or at least
curtail this conduct, the Illinois General
Assembly enacted the Employee Classification Act (ECA). The ECA prohibits
construction industry employers from
misclassifying workers as independent
contractors to avoid payroll taxes,
unemployment insurance contributions,
workers’ compensation premiums and
minimum wage and overtime payments.
Ill. Admin. Code tit. 56, pt. 240.100(a).
Recently, the ECA’s impact upon construction contractors and workers has
been amplified by the publication of
the Illinois Supreme Court’s decision of
Bartlow v. Costigan, the enactment of a
Cook County ordinance that augments
the Act’s sanctions, and the Federal
Government’s increased efforts to coordinate with state agencies to prosecute
misclassification. This article provides
practitioners with a brief reminder of
the Act’s provisions and an overview of
the aforementioned new developments.
Construction Workers Presumed to
be Employees under the ECA
Under the ECA, any individual
performing services for an entity engaged
in the performance of construction work
is generally assumed to be an employee
of that entity. 820 ILCS 185/5 (2015);
820 ILCS 185/10 (2015); See, e.g., World
Painting Co. v. Costigan, 2012 IL App
(4th) 110869. The definition of what may
be construed as “construction work” is
expansive, including not only construction itself, but also any work involving
“altering, reconstructing, repairing,
rehabilitating, refinishing, refurbishing,
remodeling, remediating, renovating,
custom fabricating, maintenance, landscaping, improving, wrecking, painting,
decorating, demolishing, and adding
to or subtracting from any building”
or structure of any kind. What is more,
the provisions of the Act also apply to
any worker moving construction related
materials around, to or from a project.
820 ICCS 185/5. Whether Courts will
broadly interpret the language of the Act
About the Authors
Lindsay Drecoll Brown
is a senior associate in
the Chicago office of Cassiday Schade LLP. She
concentrates her practice
in civil litigation defense,
with an emphasis on
construction law, professional liability and product
liability. Ms. Brown received her J.D., cum
laude, from Loyola University Chicago School
of Law, and her undergraduate degree from
Michigan State University, with high honors.
She is a member of the Illinois Association
of Defense Trial Counsel’s Construction Law
Committee.
John J. Vitanovec is an
associate at Cassiday
Schade LLP’s Chicago
office. He concentrates
his practice in the defense
of civil litigation matters
concerning construction,
medical malpractice, and
insurance coverage. He
received his undergraduate degree from
Loyola University Maryland and his J.D. from
DePaul University College of Law. He is a
member of the IDC, serving its Construction
Law Committee.
Construction Law | continued
A strict set of requirements must be met in order
to demonstrate that any given worker is not its
employee, such that his or her work may be
considered services by an independent contractor.
to apply its provisions to companies engaged in additional activities that could
be construed as construction related,
such as installing satellites on buildings,
remains to be seen. See, e.g., People ex
rel. Dep’t of Labor v. Ketterman Communs., Inc., 2014 IL App (4th) 120460-U,
¶¶ 20, 36 (noting that the issue of whether
satellite installation work fell under the
auspices of the Act was an issue not ripe
for adjudication).
When a company is engaged in the
type of work described above, a strict
set of requirements must be met in order
to demonstrate that any given worker is
not its employee, such that his or her
work may be considered services by an
independent contractor. 820 ILCS 185/5
and 10 (2015). First, the individual must
be free from control or direction over
the performance of the service for the
contractor, both under the individual’s
contract of service and in fact. 820
ILCS 185/10 (2015). Second, the service
performed by the individual must fall
outside the usual course of services
performed by the contractor. Id. Finally,
the individual must either be engaged
in an independently established trade,
occupation, profession or business, or the
individual must be deemed a legitimate
sole proprietor or to be engaged in a
partnership. Id.
The individual’s work will be
deemed for a sole proprietor or a partnership only if it meets all twelve of the
following requirements:
(1) the sole proprietor or partnership
is performing the service free from
the direction or control over the
means and manner of providing the
service, subject only to the right of
the contractor for whom the service
is provided to specify the desired
result;
is not subject to cancellation or
destruction upon severance of the
relationship with the contractor;
(3) the sole proprietor or partnership has
a substantial investment of capital in
the sole proprietorship or partnership
beyond ordinary tools and equipment and a personal vehicle;
owns the capital goods and gains
the profits and bears the losses of the
sole proprietorship or partnership;
makes its services available to the
general public or the business community on a continuing basis;
includes services rendered on a
Federal Income Tax Schedule as an
independent business or profession;
performs services for the contractor
under the sole proprietorship’s or
partnership’s name;
(8) when the services being provided
require a license or permit, the sole
proprietor or partnership obtains and
pays for the license or permit in the
sole proprietorship’s or partnership’s
name;
furnishes the tools and equipment
necessary to provide the service;
(10)if necessary, the sole proprietor or
partnership hires its own employees
without contractor approval, pays
the employees without reimbursement from the contractor and reports
the employees’ income to the Internal Revenue Service;
(11)the contractor does not represent the
sole proprietorship or partnership as
an employee of the contractor to its
customers; and
(12)the sole proprietor or partnership has
the right to perform similar services
for others on whatever basis and
whenever it chooses.
820 ILCS 185/10(c) (2015).
Of importance, a presumption of
employment will be applied to “[a]ny
contractor for which an individual is performing services” if the above requirements for independent contractor status
are not satisfied. 820 ILCS 185/10. That
is, as long as the “individual” performing
services is not a bona fide corporation. 56
Ill. Adm.Code 240.110 (2008); Michael
v. Pella Products, Inc., 2014 IL App (1st)
132695, ¶16. Notably, the ECA does
not include any provisions that directly
address whether an entity may violate
the Act while acting in the capacity of
a joint employer, nor has the issue of
joint employment been addressed by any
Illinois Appellate Court in the context
of the ECA. See 820 ILCS 185 et seq.;
Zampos v. W&E Communs., 970 F. Supp.
2d 794 (N.D. Ill. 2013). Thus, prudent
contractors not only need to carefully
adhere to ECA guidelines with respect
to their own practices, but may also need
to be vigilant of the practices of entities
sharing their jobsite responsibilities lest
they be found in violation of the Act with
respect to a worker brought to the project
as an “independent contractor” by as a
less scrupulous contractor.
Consequences of Violations
Set Forth in the Act
When the ECA was initially enacted, there was no mechanism for
employers to challenge a determination
that their company had committed an
infraction. However, effective January
1, 2014, an Amendment to the enforcement proceeding provision, located in
Section 25 of the Act, added language to
remedy that flaw. Pursuant to the 2014
amendment, the Department of Labor
must notify an employer of that a complaint has been filed within 120 days. 820
ILCS 185/25(a). That written notification
must inform the employer of the nature
of the allegations being investigated,
as well as the location of the work at
issue and the contractors affected. Id.
Additionally, an approximation as to the
date of the implicated project(s) must be
provided. Id. If a violation is found as a
result of that complaint, then a written
finding with any proposed relief due and/
or penalties assessed must be given to the
employer and the matter proceeds to a
formal hearing before an Administrative
Law Judge. 820 ILCS 185/25(c).
The result of such a hearing can be
quite costly for a construction industry
employer. The Assembly did not hold
back on violation penalties, which have
been characterized as “draconian” and
“overly harsh.” “A look at the Illinois
Employee Classification Act” Markus
May, Eckhart Kolak LLC, available
at.illinois-business-lawyer.com/Documents /A%20Look%20at%20the%20
Illinois%20Employee%20Classification%20Act.PDF. For each individual
employee that is found to be misclassified
the contractor faces a civil penalty of up
to $1,000. 820 ILCS 185/40 (2015). Any
subsequent violations cost $2,000—and
each individual day that passes where the
worker continues to perform services under the inappropriate heading is deemed
a separate and distinct violation under
the Act. Id. Moreover, if the contractor is
found to have committed a second violation, the contractor will be prohibited
from working on any state projects five
years. 820 ILCS 185/42 (2015).
The ECA also provides for criminal
prosecution of anyone found to be in
willful violation of the Act’s provisions.
An adjudication of a willful violation
can result in penalties up to double the
statutory amount, punitive damages, and
conviction of a Class C misdemeanor.
820 ILCS 185/45 (2015). If a contractor
willfully violates the ECA a second time,
they face a Class 4 felony. Id.
In addition to sanctions imposed for
violations investigated by the Department of Labor, the ECA enables any
person allegedly aggrieved by a violation
of the Act to file a civil action against the
employing contractor to collect (1) the
amount of wages and salary and other
benefits lost by reason of the violation
plus an equal amount in liquidated damages; (2) compensatory damages and an
amount of $500 for each violation of the
Act; and (3) attorney fees and costs. 820
ILCS 185/60 (2015).
The ECA Withstood Constitutional
Challenge in Bartlow v. Costigan
In Bartlow v. Costigan, our state’s
supreme court examined the parameters for independent contractor status
included in the Act in the face of a constitutional challenge of vagueness. 2014
IL 115152 denied October 14, 2014,
135 S. Ct. 377 (2014)). The plaintiffs,
partners in a company specializing in the
installation of siding, windows, gutters,
and roofs, filed an action against the
Department of Labor seeking injunctive
relief and a declaratory judgment. Id.
¶ 4. Prior to the filing of the plaintiffs’
complaint, the Department collected over
750 documents during an investigation
and determined that the plaintiffs’ company had misclassified 10 individuals as
independent contractors for periods of
time between 8 and 160 days. Id. ¶¶ 6-7.
The Department warned of a potential
fine of approximately $1.7 million before
sending the plaintiffs notice of a second
investigation. Id. ¶¶ 7-10. The plaintiffs
sought to enjoin the Department from
proceeding with its lawsuit, requesting
that the court enjoin the Department from
enforcing the provisions of the ECA and
interfering with their business. ¶ 10. The
Court considered the plaintiffs’ argument
that the ECA was unconstitutional because it was impermissibly vague under
the due process clauses of the United
States and Illinois Constitutions. Id.
The plaintiffs’ vagueness challenge
specifically focused on section 10 of the
ECA, which sets forth the exception of
when an individual is an independent
contractor. Id. ¶ 38. Primarily, the
plaintiffs argued that this section was
Construction Law | continued
unconstitutionally vague because a
person of ordinary intelligence could
not determine from the language of the
Act whether an individual qualifies for
exemption under Section 10. Id. ¶ 39.
The supreme court disagreed, first
finding that a careful review of section
10 demonstrates that (1) its provisions do
provide a person of ordinary intelligence
a reasonable opportunity to understand
how to qualify for the independent contractor exception, and (2) the provisions
are sufficiently detailed and specific
to preclude arbitrary enforcement. Id.
¶ 45. Alternatively, the plaintiffs argued
that forcing of contractors to obtain
financial and scheduling information
within the exclusive control of their
subcontractors makes complying with
the ECA’s exemptions impossible.
Id. ¶ 49. The supreme court similarly
rejected this second argument, finding
that contractors have the opportunity
to demand that subcontractors furnish
the relevant information before entering
into a subcontract in order to ensure that
he or she is properly classified. Id. ¶ 49.
Sanctions Imposed on ECA Violators
Under the 2015 Cook County Wage
Theft Ordinance
A finding of a violation of the ECA
could burn construction industry employers well beyond the penalties explicitly
authorized under the provisions of the
ECA, tarnishing the entity’s professional
reputation, impacting its relationship
with labor union representatives, and
subjecting the company to add-on penalties imposed by local ordinances. One
such ordinance is the Cook County Wage
Theft Ordinance, which became effective
on May 1, 2015. Under the provisions of
that ordinance, any Cook County entity
found guilty of violating the ECA within
For each individual employee that is found to be
misclassified the contractor faces a civil penalty of up
to $1,000. 820 ILCS 185/40 (2015). Any subsequent
violations cost $2,000—and each individual day
that passes where the worker continues to perform
services under the inappropriate heading is deemed
a separate and distinct violation under the Act.
the past five years may be (1) ineligible
to receive property tax incentives, (2)
disqualified from receiving or renewing
a Cook County business license, and (3)
barred from entering into a contract with
Cook County. Chicago, Ill., Art. II, Div.
2, §74-74; Art. IV, Div. 4, §34-179(a);
Art. X, §54-384(a)(8) and §54-391(b). In
addition, the contractor may be found in
default of any existing County contracts.
Chicago, Ill., Art. IV, Div. 4, §34-179(c).
Federal Prosecution of
Misclassification Amplifies the
Impact of ECA Violations
Pursuant to a Memorandum of
Understanding, the Illinois Department
of Labor shares information pertaining
to its ECA investigations with the United
States Department of Labor’s Wage and
Hour Division so that those agencies—as
well as the IRS—can jointly prosecute
worker misclassification. http://www.
dol.gov/whd/workers/MOU/il.pdf. Thus,
even after resolving a state ECA claim,
contractors may face federal prosecution
for illegal misclassification under the
federal Fair Labor Standards Act or for
tax evasion. This coordination is part of
a federal “Misclassification Initiative”
aimed to target this problem which,
according to Thomas Perez, Secretary of
Labor, is quite serious in the construction
arena. https://blog.dol.gov/2015/04/23/
battling-a-damaging-workplace-trend/.
Secretary Perez notes that “[m]isclassification cheats every taxpayer, and
it undermines employers who play by
the rules. … We are taking a vigorous
approach to enforcement[.]” Id.
Conclusion
The cases, amendments and legislative changes addressed in this column
call for a re-assessment of independent
contractor relationships, contracts,
and day-to-day practices followed by
businesses in the construction industry.
Practitioners are forewarned that ongoing
enforcement of the ECA indicates that
the language of the Act will be applied
broadly and that penalties for violations
extend well beyond those set forth in
the Act. Construction entities should
therefore be made aware of all new
developments in the arena of employee
classification regulations, particularly
when the company relies upon the
services of independent contractors.
Civil Practice and Procedure
Donald Patrick Eckler and Kelly A. Kono
Restricting and Redefining
Professional Privilege and Duties
in Illinois
March 19, 2015 was an interesting
and important day for professionals
across the state of Illinois as the Illinois
Supreme Court demonstrated its willingness to take the path less traveled when
it comes to privilege and professional issues. In three separate opinions, the court
tackled the accountant-client privilege,
the self-critical analysis privilege, and
the duties of captive insurance agents.
This article examines each of these decisions and analyzes their impact on the
practice of professional liability defense.
Brunton v. Kruger
Brunton v. Kruger is a prime example
of the court strictly following statutory
language and departing from what other
states have done when it comes to the
interpretation of privilege, in particular
the accountant-client privilege. Illinois
has long been in the minority in holding
to the control group test in relation to the
scope of the attorney-client privilege, and
has taken a similar minority position, this
time guided by the statute, in construing
the accountant-client privilege. The
accountant-client privilege is created
in Illinois by Section 27 of the Illinois
Public Accounting Act (Act), which
provides that “a licensed or registered
certified public accountant shall not be
required by any court to divulge information or evidence which has been obtained
by him in his confidential capacity as a
licensed or registered certified public
accountant.” 225 ILCS 450/27. At issue
in Brunton was the basic question of to
whom the privilege belongs.
In Brunton v. Kruger, the daughter
of Helen and Gordon Kruger (Krugers),
June Brunton, initiated a will contest
against her brother Robert Kruger and
other family members. Brunton v. Kruger, 2015 IL 117663, ¶ 4. June, who was
not named in the trusts of her parents,
alleged undue influence on behalf of
certain family members who were named
as beneficiaries of the trusts, including
Robert. Brunton, 2015 IL 117663, ¶ 4.
Prior to their death the Krugers consulted
with the accounting firm of Striegel,
Knobloch & Co, LLC (Striegel) during
the process of planning their estate. Id.
¶ 5. Striegel provided information to
assist the attorneys for the Krugers in
preparing trust documents and “pour
over” wills. Id. Brunton claimed that
undue influence on the Krugers took
place during the estate planning process
and sought to obtain information and
evidence relating to discussions and
information provided by the Krugers and
any of the trusts beneficiaries to Striegel
during the preparation of the trust
documents. Id. ¶¶ 5-6. Brunton issued a
discovery subpoena which was later followed by the Estate issuing an identical
subpoena for the same information. Id.
One of Striegel’s CPAs complied
with the Estate’s subpoena, turning over
all of the documents in its possession that
related to the Krugers’ estate planning.
Id. ¶ 7. The CPA did not comply with
Brunton’s subpoena and Brunton filed
a motion to compel compliance. In a
motion to quash the subpoena, Striegel
invoked Section 27 of the Act, claiming
that the documents were protected from
disclosure. Id.
The circuit court found that the
documents were protected under Section
27, but also found that Striegel waived
the privilege when it provided the documents to the Estate. Id. ¶ 9. Striegel’s
attorney, Matthew Tibble, refused to
comply with the discovery order and
requested that he be found in contempt
and fined for his refusal so as to allow
the matter be reviewed by the appellate
About the Authors
Donald Patrick Eckler
is a partner at Pretzel &
Stouffer, Chartered. He
practices in both Illinois
and Indiana in the areas
of commercial litigation,
professional malpractice
defense, tort defense, and
insurance coverage. Mr.
Eckler earned his undergraduate degree from the University of Chicago
and his law degree from the University of Florida.
He is a member of the Illinois Association of
Defense Trial Counsel, the Risk Management
Association, and the Chicago Bar Association.
He is the co-chair of the CBA YLS Tort Litigation
Committee. The views expressed in his article
are his, and do not reflect those of his firm or
its clients.
Kelly A. Kono is an associate at Pretzel & Stouffer,
Chartered. Her practice is
concentrated in product
liability defense, professional liability defense, and
general civil litigation. She
received her undergraduate degree from Washington University in St. Louis
and her juris doctorate from the University of
Illinois College of Law.
Civil Practice and Procedure | continued
court. Id. The circuit court found him
in contempt.
On appeal, the appellate court
vacated the contempt order against
Tibble and affirmed the circuit court. Id.
¶ 11. The appellate court concluded that
estate planning is a form of “accounting
activities” as provided in the statute
under Section 8.05, and thus subject
to Section 27. Id. The appellate court
further concluded that the client, not the
CPA, is the holder of the privilege. Id.
As the holder, the client had the power
to waive the privilege, which the court
held occurred because the Estate filed
a brief with the court in support of the
circuit court’s decision. Id.
While the supreme court affirmed
the lower court’s judgments, it reversed
their decisions as to the privilege holder.
Id. ¶ 90. The court rejected the appellate
court’s reasoning that the client, not the
accountant, is the holder of the privilege
in Section 27. Id. ¶¶ 33-34. In doing so,
the court distinguished the privilege in
Section 27 from the number of other
evidentiary privileges in the Illinois Code
of Civil Procedure on the grounds that
the accountant privilege is codified in
the Public Accounting Act, which is not
part of the legislatively created body
of evidentiary privilege, but expressly
tied to the legislative scheme enacted to
regulate the public accounting profession
in Illinois. Id. ¶ 35. The court explained
that the separate treatment of privileges
in the context of the accountant-client
relationship combined with the plain
language of Section 27 reveals the
legislative intent to confer the privilege
in Section 27 on the accountant who
provides the services, not the client who
receives them. Id. ¶ 46.
The court observed that the accountant’s privilege is, for practical purposes,
a limited one. Id. ¶ 47. It made clear that
if the client is still living, the privilege
does not bar the client from voluntarily
producing the information, or prevent a
client from disclosing information in his
possession under court order. Id. Rather,
the court observed that the accountant’s
full power over the information or
evidence involves situations such as
the one in this case where the client is
deceased. Id.
Next, in deciding that the CPA
holds the privilege, the Illinois Supreme
Court found that the issue of waiver
“simple” to resolve. Id. ¶ 85. The court
explained that whenever a privilege
holder voluntarily discloses or consents
to disclosure of privilege information to
a third-party, the privilege is waived. Id.
¶¶ 86-87. In this case, the court held that
the accountant, as the privilege holder,
disclosed the information and evidence
to the Estate in the subpoena seeking
the same information and evidence as
Brunton, the privilege was waived and
Brunton was entitled to compliance of
her subpoena. Id. ¶ 88.
Illinois stands in stark contrast with
the law of other states regarding the
holder of the privilege. The language of
most states’ statutes requires the client’s
consent in order to disclose information
of conversations by the accountant with
the client. Several states, including Colorado (Colo. Rev. Stat. § 13-90-107),
Florida (Fla. Stat. § 90.5055), Georgia
(Ga. Code Ann. § 43-3-29), Idaho (Idaho
Code Ann. § 9-203A), Kentucky (Ky.
Rev. Stat. Ann. § 325.44), Kansas (Kan.
Stat. Ann. § 1-401), Louisiana (La. Code
Evid. Ann. art. 515), Maryland (Md.
Code Ann., Cts. & Jud. Proc. § 9-110),
Michigan (Mich, Comp. Laws § 339.732),
Missouri (Mo. Rev. Stat. § 326.22),
Nevada (Nev. Rev. Stat. Ann. § 49.195),
Oklahoma (Okla. Stat. tit. 12, § 2502.1)
and Pennsylvania (63 Pa. Stat. Ann. §
9.11a) all acknowledge that the privilege
belongs to the client, not the accountant.
In the wake of this decision, accountants
and those that represent them should take
a second look at the accountant-client
privilege as the court has made clear that
the privilege belongs to the accountant,
not the client, and that the accountant
controls disclosure regardless of the
client’s approval or disapproval.
Harris v. One Hope United
In One Hope United, the Illinois
Supreme Court refused to recognize the
self-critical analysis privilege, applied
in federal courts around the country, and
designed to protect documents containing candid and self-critical statements.
Instead, it held that the legislative intent
behind the Acts which the defendants
urged were analogous in application did
not allow for the extension of the privilege, and the court therefore deferred to
the legislature on the issue of creation of
the privilege.
The One Hope United case arose out
of the death of seven-month-old Marshana Philpot. The child’s death occurred
while in her mother’s care and while
her family was enrolled in One Hope’s
“Intact Family Services” program, an
extension of the Illinois Department
of Child and Family Services (DCFS).
Harris v. One Hope United, Inc., 2015
IL 117200, ¶ 3. The Cook County Public
Guardian, serving as the administrator
of Marshana’s estate, filed suit against
Marshana’s mother and One Hope. One
Hope United, Inc., 2015 IL 117200, ¶ 3.
In the complaint, the Public Guardian
alleged that following a DCFS investigation, Marshana was removed from
the care of her mother and hospitalized
for failure to thrive. Id. ¶ 4. Following
her discharge from the hospital, she
was ordered to live with her aunt, but
was eventually returned to the care of
her mother. Id. Marshana subsequently
drowned while in her mother’s care after
she was left unattended while bathing. Id.
As a result, the Public Guardian alleged
that One Hope failed to protect Marshana
and should not have allowed her to return
to her mother’s care due to her history of
neglect and failure to complete parenting
classes. Id.
During the course of discovery, the
executive director of One Hope revealed
the existence of a “Priority Review” regarding Marshana’s case. Id. ¶ 5. Per the
executive director, One Hope employs a
“continuous quality review department”
to investigate cases, evaluate the services
provided, identify areas of improvement,
and assess whether the outcome was
successful or unsuccessful. Id. One Hope
refused to produce the report, asserting
it was protected from discovery by
the self-critical analysis privilege. Id.
Ruling on the Public Guardian’s motion
to compel, the circuit court held that
the privilege did not apply and ordered
production of the report. Id. ¶ 6. One
Hope refused to do so and was held in
“friendly contempt” and imposed a fine
of $1 per day. Id.
In determining whether Illinois
should recognize the self-critical analysis
privilege, the supreme court first examined the privilege’s origins, which stem
from a federal medical malpractice case,
Bredice v. Doctors Hosp., Inc., 50 F.R.D.
249 (D.D.C. 1970). One Hope United,
2015 IL 117200, ¶ 8. There, the court
held that the administrator of an estate
could not obtain minutes of a hospital’s
staff review meeting on the basis that
the confidentiality of the staff’s evaluation of potential improvements was
so essential to the self-review process
that allowing disclosure would chill the
One Hope refused to produce the report,
asserting it was protected from discovery by the
self-critical analysis privilege. Ruling on the Public
Guardian’s motion to compel, the circuit court
held that the privilege did not apply and ordered
production of the report.
candor required for such a process. Id.
The Bredice court recognized that the
potential benefits of improved healthcare
outweighed the needs of the party seeking discovery, and accordingly held that
such documents should not be turned
over without a showing of good cause. Id.
The court next turned to application
of the privilege in Illinois. It observed
that in the two other cases in which
the self-critical analysis privilege had
been claimed, both appellate courts had
declined to recognize the privilege. Id.
¶ 15. In People v. Campobello, 348 Ill.
App. 3d 619 (2d Dist. 2004), the second
district was asked to recognize the
privilege in the context of a case involving alleged molestation case of a young
girl by a priest. One Hope United, 2015
IL 117200, ¶ 15. The Roman Catholic
Diocese of Rockford argued that the
records of its misconduct officer and
intervention committee were the product
of a function analogous to internal
quality control processes undertaken by
hospitals and which are protected under
the Medical Studies Act (735 ILCS
5/8-2101). Id. ¶ 20. The appellate court
rejected this argument, stating that the
privilege implicated competing public
policy considerations and was therefore
best left to the legislature. Id.
In Rockford Police Benevolent &
Protective Ass’n v. Morrissey, 398 Ill.
App. 3d 145 (2d Dist. 2010), the Illinois
Appellate Court, First District, considered the self-critical analysis privilege in
the context of a Freedom of Information
Act (FOIA) request for production of a
survey conducted by Rockford College
at the request of the Rockford Police
Department. One Hope United, 2015 IL
117200, ¶ 17. The first district refused
to recognize the privilege, observing
that the self-critical analysis privilege
was not in the enumerated exemptions
listed in the FOIA. Id. ¶ 18. Similar to the
Illinois Appellate Court Second District
in Campobello, the first district rejected
the analogy to the privilege provided by
the Medical Studies Act, observing that
the legislature could have codified the
privilege in the FOIA, but declined to do
so, while it expressly chose to codify it in
the Medical Studies Act. Id. Therefore,
the First District refused to recognize the
self-critical analysis privilege.
Finally, the court considered the
appellate court’s examination of the
privilege in the current case. There, One
Hope argued that shielding self-critical
documents would further the purpose
behind the Child Death Review Team
Act (20 ILCS 515/1 et seq.) and that the
rationale behind the Medical Studies
Act should be extended analogously.
Id. ¶ 21. The appellate court rejected
Civil Practice and Procedure | continued
these arguments. Id. ¶ 22. Its review
of the Child Death Review Team Act
revealed that the Act encouraged, as
opposed to discouraged, the disclosure
of the information sought by the Public
Guardian. The court further ruled that by
the Medical Studies Act’s own terms, it
does not apply to institutions such as One
Hope. Id. ¶ 23.
Turning to the case before it, the court
considered its own decision in People ex
rel. Birkett v. City of Chicago, 184 Ill. 2d
521 (1998), where it stated that creation
of a new privilege is presumptively a
legislative task, but acknowledged that
creation of an evidentiary privilege was
possible in rare circumstances where
the following conditions have been
met: (1) the communications originated
in a confidence that they would not be
disclosed; (2) the element of confidentiality was essential to the relation
between the parties; (3) the relationship
was one which the community believes
ought to be sedulously fostered; and
(4) the injury that would result to the
relationship through disclosure would be
greater than the benefit gained. One Hope
United, 2015 IL 117200, ¶ 27.
Once again, One Hope argued
that protection of the documents was
consistent with the intent of the Child
Death Review Team Act and the Medical
Studies Act. Id. ¶ 34. The court disagreed.
Following the appellate court, it noted
that by its own terms, the Medical Studies Act does not apply to institutions such
as One Hope. Id. ¶ 35. According to the
court, this demonstrated the legislature’s
intent to limit, rather than expand, the
scope of the privilege. Id. ¶ 36. Reviewing the Child Death Review Team Act,
the court found that the Act’s own policy
underscored the need for a determination
of the cause of death and the development of policies to prevent similar
deaths in the future. Id. ¶ 37. Therefore,
it concluded, the legislature determined
that access of such information is necessary to achieve these measures. Id. As
a result, the court concluded that there
was “clear evidence that legislature did
not intend to expand any existing quality
control privilege.” Id. ¶ 38. On this basis,
it declined to recognize the self-critical
analysis privilege, deferring to the legislature to create privileges where deemed
necessary. This ruling is in keeping with
the Illinois Supreme Court’s reticence
to expand privileges and the policy to
encourage open discovery.
Skaperdas v. Country Casualty
Insurance Company
Finally, the court delivered another
blow to professionals in Illinois in its
decision in Skaperdas v. Country Casualty Insurance Company, expanding the
definition of “insurance producer” and
holding that a captive insurance agent
owes a duty of care to a client to obtain
requested coverage under the Illinois
Code of Civil Procedure (Code), 735
ILCS 5/2-2201.
In that case, Country Casualty, via
its agent Tom Lessaris, issued an automobile insurance policy to the one of the
plaintiffs, Steven Skaperdas. Skaperdas
v. Country Cas. Ins. Co., 2015 IL 117021,
¶ 4. Following an accident in which
Skaperdas’s fiancé, Valerie Day, was
injured while driving one of her fiancé’s
vehicles, Country Casualty required
Skaperdas to amend his policy to include
Day as an additional driver. Skaperdas,
2015 IL 117021, ¶ 4. Skaperdas met with
Lessaris to change the policy. Id. Lessaris
prepared the policy, but only identified
Skaperdas as the named insured, and
identified the driver as a “female, 3064.” Id. Subsequently, Day’s minor son
was struck by a vehicle while riding his
bicycle. Id. ¶ 5. The driver’s policy limit
was insufficient to cover the minor’s
injuries, so Skaperdas and Day made a
claim for underinsured motorist benefits
under the policy. Id. Country Casualty
denied the claim on the basis that neither
Day nor her son was listed as a named
insured. Id.
Skaperdas and Day filed a complaint
alleging, inter alia, that Lessaris was
negligent in failing to obtain the insurance as requested by Skaperdas. Id. ¶ 6.
Specifically, they alleged that Lessaris
breached his duty to exercise ordinary
care in renewing, procuring, binding and
placing the requested insurance coverage
as provided by Section 2-2201 of the
Code. Id. Lessaris moved to dismiss the
negligence claim pursuant to Section
2-619 of the Code, claiming he did
not owe the plaintiffs a duty of care in
procuring coverage. Id. ¶ 7.
The circuit court agreed and granted
the motion to dismiss the negligence
count. Id. ¶ 8. The appellate court
reversed, holding that a plain reading of
Section 2-2201 along with the definition
of “insurance producer” set forth in
Section 500-10 of the Illinois Insurance
Code established that “any person
required to be licensed to sell, solicit, or
negotiate insurance has a duty to exercise
ordinary care in procuring insurance.” Id.
¶ 9 (internal citations omitted).
On appeal to the Illinois Supreme
Court, Lessaris argued that Section
2-2201 does not impose a duty of
ordinary care on a “captive insurance
agent” with regard to procuring insurance
for a client. Id. ¶ 12. Rather, he argued, a
captive insurance agent is one who owes
a duty to the company who employs
him, not the insured; only insurance
brokers, because they are employed by
the insured, owe a fiduciary duty to the
insured. Id. Section 2-2201 was intended
to limit the liability of insurance brokers
in a fiduciary relationship, and as an
insurance agent he did not owe a duty to
the plaintiffs. Id.
Considering Lessaris’ arguments,
the court turned to the statute. Section
2-2201 provides in relevant part that
“[a]n insurance producer, registered firm,
and limited insurance representative
shall exercise ordinary care and skill in
renewing, procuring, binding, or placing
the coverage requested by the insured or
proposed insured.” Id. ¶ 17 (citing 735
ILCS 5/2-2201(a)). The court noted that
the term “insurance producer” was not
defined in Section 2-2201. Skaperdas,
2015 IL 117021, ¶ 18. It further noted
while that insurance law distinguishes
between insurance agents and brokers,
it does not address whether insurance
agents, brokers, or both could be classified as an “insurance producer.” Id.
¶ 19. The court further observed that
Black’s Law Dictionary included the
term “producer” in both the definition
of an “insurance agent” and an “insurance broker.” Id. ¶ 20. Thus, finding the
statute to be ambiguous as to the term
“insurance producer,” the court turned
to extrinsic aids of construction. Id.
¶¶ 27-28.
The court began by examining the
definition of “insurance producer” in
Section 500-10 of the Insurance Code
which defines an insurance producer as
“a person required to be licensed under
the law of the State to sell, solicit, or
negotiate insurance.” Id. ¶ 29 (citing
215 ILCS 5/500-10). Although the
defendants argued that the Insurance
Code was inapplicable because it was
not part of the Code of Civil Procedure,
the court observed that Section 2-2201
expressly refers to the Insurance Code,
recognizing a connection between the
two provisions. It also acknowledged
that the legislature was aware of Section
2-2201 when it enacted the definition of
“insurance producer” when the Insurance
Code became effective in 2002. Skaperdas, 2015 IL 117021, ¶ 30. The court
further examined the legislative history
of Section 2-2201 and found that the term
“insurance agent” was consistently used
with no distinction between agents and
brokers. Id. ¶¶ 31-33.
Finally, the court also observed
that Illinois courts have previously
recognized that a captive agent may owe
a duty to an insured in certain situations.
Id. ¶ 35. For example, the Illinois Appellate Court, Third District, held that
an agent has a duty of care such he may
be liable for unreasonably delaying an
application for life insurance. Id. (citing
Talbot v. Country Life Ins. Co., 8 Ill. App.
3d 1062, 1065 (3d Dist. 1973)). More
recently, the Illinois Appellate Court,
First District, affirmed that a captive
insurance agent may owe a proposed
insured a duty of ordinary care in some
circumstances, though it declined to
find such circumstances existed based
on the facts at hand. Skaperdas, 2015 IL
117021, ¶ 36 (citing Bovan v. American
Family Life Ins Co., 386 Ill. App. 3d 933,
940-41 (1st Dist. 2008)).
On these grounds the court concluded that “the best evidence of the
legislature’s intent in using the term
‘insurance producer’ [was] the statutory
definition in Section 500-10 of the Insurance Code.” Skaperdas, 2015 IL 117021,
¶ 43. In light of that definition, Section
2-2201 mandates that a person who is
required to be licensed to sell insurance
has a duty to exercise ordinary care and
skill in the renewing, procuring, binding,
or placing of coverage as requested
by the client. Id. As a result, the court
concluded that Section 2-2201 imposed
a duty of ordinary care on Lessaris as a
captive insurance agent to procure the
coverage requested by Skaperdas and
Day. Id. ¶ 45.
For those who practice professional
liability, an understanding of this case
will be critical going forward, as both
agents and brokers now have a statutory duty to act with ordinary care when
procuring coverage for their clients.
Conclusion
As the first two cases make clear,
the Illinois Supreme Court construes
privilege narrowly and defers to the General Assembly on the issue of privilege.
Professionals should take note. With
regard to the accountant-client privilege,
accountants and those representing them
must be aware that in Illinois it is the
accountant, not the client, who holds (and
therefore may waive) the account-client
privilege. Likewise, in One Hope, the
court made clear that its adoption of common law privilege is a rare exception and
must be based on clear statutory intent.
Finally, for those representing insurance
agents and brokers, under Skaperdas, the
court has effectively written away, when
it comes to duty of care, the distinction
between insurance agents and brokers.
Commercial Law
James K. Borcia
Tressler LLP, Chicago
Raising The Scrutiny On
Class Action Settlements
Class action settlements have come
under the judicial microscope with farreaching consequences for the future of
settling class litigation. Scrutiny of class
action settlements began with the 1988
Private Securities Litigation Reform Act
and, later the 2005 Class Action Fairness
Act, which were intended to curb abuses
in class action litigation. These statutes
added provisions that required a direct
connection between attorney fee awards
and the value of the class recovery.
Federal courts have now started
setting new, more stringent standards
for settlement of class action litigation,
particularly with regard to notice of the
settlement and settlement administration.
This new scrutiny, which will have ramifications for plaintiffs and defendants,
is evident in two respects. First, there
is increased reliance by the courts and
parties on the Federal Judicial Center’s
notice and claims process guidance. Second, the United States Court of Appeals
for the Seventh Circuit’s recent opinions
on settlement issues, which will impact
state courts. While federal court opinions
are not binding on Illinois state courts,
state courts have looked to federal law
for guidance with respect to class actions,
and will likely do so in the future.
The Impact of the Federal Judicial
Center’s Checklist
The increased focus on notice and
settlement administration issues can be
traced to the Federal Judicial Center’s
Judges’ Class Action Notice and Claims
Process Checklist and Plain Language
Guide (2010). The checklist is a guidebook to help judges navigate class action
notice and settlement administration
issues. It has been cited and relied on
with increasing frequency by courts
across the country. In some instances its
content has been the basis for rejecting
a proposed settlement and, in others, as
a benchmark against which a settlement
is measured. Objectors to class settlements have also based later-sustained
objections on noncompliance with the
checklist. The appropriateness of the
claims processes is just one of the issues
the checklist addresses but, courts have
also cited it for a wide array of other issues. Some courts have taken to advising
parties about notices and notice plans.
See, e.g., Underwood v. Carpenters
Pension Trust Fund—Detroit & Vicinity,
No. 13-cv-14464, 2014 WL 4602974,
at *11 (E.D. Mich. Sept. 14, 2014). The
checklist is comprehensive and offers
courts guidance and pros and cons on
various forms of notice.
In terms of notice plans, the checklist
provides standards for content. Courts
routinely use the checklist to ensure
that all required content is included in
a proposed notice and that it is written
in plain language. See, e.g., Sanchez v.
Creekstone Farms Premium Beef, LLC,
No. 11-4037-EFM-KGG, 2012 WL
380279 (D. Kan. Feb. 6, 2012) (approving the content and form of proposed
notice “given that it is based on the FJC’s
example”); Vargas v. Capital One Fin.
Advisors, No. 12 Civ. 5728(LTS)(DCF),
2013 WL 4407094 (S.D.N.Y. Aug. 15,
2013) (comparing notice content to the
checklist’s recommendation to evaluate
notice adequacy; approving in light of
compliance);
The checklist also provides standards to facilitate the proposed plan
for reaching a sufficient percentage
of class members, which the checklist
suggests is between 70 percent and 95
percent. See, e.g., Swift v. DirectBuy, Inc.,
Nos. 2:11-CV-401-TLS, 2:11-CF-415,
2:11-CV-417-TLS, 2:12-CV-45-TLS,
2013 WL 5770633 (N.D. Ind. Oct. 24,
2013). It also contains guidance on the
use of print and electronic media where
necessary, cautioning against the use
of Internet banners alone for purposes
of notice. Courts have followed this
admonition. See, e.g., In re Motor Fuel
Temperature Sales Practices Litig., No.
07-MD-1840-KHV, 2013 WL 139732
(D. Kan. Jan. 10, 2013) (rejecting notice
plan relying exclusively on Internet banner ads for some segments of the class).
The Seventh Circuit’s
Recent Opinions
In addition to the growing influence
of the Federal Judicial Center’s checklist,
About the Author
James K. Borcia is a partner with the Chicago firm of
Tressler LLP, 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.
the Seventh Circuit has issued three
recent opinions, all authored by Judge
Posner, that touch on notice and settlement administration issues.
In the first case, Eubank v. Pella
Corp., 753 F.3d 718, 728 (7th Cir. 2014),
the Seventh Circuit took issue with the
notice because it lacked details about the
substitution of class representatives, their
views of the settlement, their relationship with class counsel, the financial
condition of class counsel, and the level
of detail provided in the description of
the awards available to claimants. The
court deemed the notice a non-neutral
communication that failed to provide a
truthful basis on which class members
could rely to decide whether to opt out.
Eubank, 753 F.3d at 728. This aspect of
Eubank is potentially far-reaching for
both counsel and notice administrators
as it raises questions about whether an
expert must investigate the issues raised
and if so how much information must
be included. In addition to notice, the
Eubank court also noted that the number
of claims made by class members is
critical to calculating the value of a
settlement. Id.
The court expanded on this theme in
Redman v. RadioShack Corp., 768 F.3d
622 (7th Cir. 2014) when it analyzed the
number of claims filed by class members
in relation to the value of the settlement
and, correspondingly, to class counsel’s
fee petition. After taking issue with the
fees approved by the district court as
bearing an inappropriate relation to the
benefit realized by class members, the
court proposed two solutions: (1) reallocate a portion of the attorney fees to the
class award, and (2) spend more on notice
of settlement to boost the class recovery
in order to justify a fee request. Redman,
768 F.3d at 632. Despite acknowledging
the connection between notice and claims
Now the question is what must counsel do to comply
with these recent decisions to ensure approval of
the settlement on a class basis. Costs will always be
a factor, particularly in cases where non-distributed
funds revert to the defendant. Nevertheless, certain
general practices should be followed to ensure
approval of the class settlement.
filed, the Redman court also indicated
that class counsel should economize
on notice and administrative expenses,
regardless of whether those expenses
come out of the total settlement fund or
are paid separately by the defendant. Id.
at 630. The Seventh Circuit thus left the
unmistakable impression that after Redman parties negotiating settlements must
ensure that sufficient notice is carried out
so as to justify approval of the settlement.
Finally, in Pearson v. NBTY, Inc.,
772 F.3d 778 (7th Cir. 2014), the Seventh
Circuit delved into the claims process,
criticizing the complexity of the claim
form and claim validation process, the
settlement website, and the requirement
that claiming class members sign their
claim form under penalty of perjury.
Takeaways
Now the question is what must
counsel do to comply with these recent
decisions to ensure approval of the
settlement on a class basis. Costs will
always be a factor, particularly in cases
where non-distributed funds revert to
the defendant. Nevertheless, certain
general practices should be followed
to ensure approval of the class settlement. First, follow the Federal Judicial
Center’s checklist regarding notice. It
has proven to be a safe harbor of sorts.
Second, plan for and allow for sufficient
notice commensurate with your case.
Third, simplify the claims processes.
Pearson shows that the Seventh Circuit
believes that the point of the settlement
process is not to force potential claimants to prove that they actually want to
participate, but to efficiently provide
relief to class members. In addition to
calling into question the requirement
that claiming class members submit
elaborate documentation and sign their
claim forms under penalty of perjury,
the Seventh Circuit noted that checks
could have been sent to known class
members, rather than requiring a claims
process. Pearson, 772 F.3d at 783–84.
Fourth, following the philosophy of
simplification, minimize restrictions on
a class member’s ability to make use of
a settlement award. Redman, 768 F.3d
at 631. Finally, parties should distribute
as much of the available relief to class
members. Some class settlements are
now designed to include a floor setting
the minimum amount that must be
distributed to claiming class members,
and a backup mechanism that permits a
second round of distribution if necessary. Third Quarter 2015 | IDC QUARTERLY | 27
Medical Malpractice Update
Dina L. Torrisi and Zeke N. Katz
HeplerBroom LLC, Chicago
Keeping Physicians’ Staff Privilege
Files Exempt from Discovery:
What Tools Are Available to
Defense Counsel?
Defense counsel frequently encounter discovery requests for hospitals’
staff privilege files. Intuitively, the
quest to keep such documents free from
discovery is immediately triggered. The
issue of whether a plaintiff may obtain a
physician’s privilege file, including that
physician’s staff privileges application
and which privileges were actually
granted from a defendant hospital, is currently before the Illinois Supreme Court
in Klaine v. Southern Illinois Hospital
Services, No. 118217.
Typically, staff privilege files are
sought in cases involving a negligent
credentialing claim. Illinois law requires
a plaintiff to prove three things in order
to prevail on a negligent credentialing
claim: (i) the hospital breached its duty
of care by improperly granting staff
privileges to an unqualified physician;
(ii) the physician breached the medical
standard of care by providing medically
negligent treatment in conjunction with
their negligently awarded privileges; and
(iii) the awarding of the privileges was
the proximate cause of the plaintiff’s
injuries, meaning that the direct cause of
the injuries was the fact that the hospital
negligently granted staff privileges to
the doctor. Frigo v. Silver Cross Hosp.
& Med. Ctr., 377 Ill. App. 3d 43, 72 (1st
Dist. 2007), as modified, Sept. 20, 2007.
In defending such claims, defense
counsel may assert that the privilege file
is not discoverable based upon the Data
Collection Act, the Medical Studies Act
and Illinois Supreme Court Rule 201(b)
(1). This article evaluates these grounds,
how this issue has been treated by various
Illinois courts, and the recent appellate
decision in Klaine.
Health Care Professional
Credentials Data Collection Act,
410 ILCS 517/15
The Health Care Professional Credentials Data Collection Act (Data
Collection Act), 410 ILCS 517/15, states
that “[a]ny credentials data collected
or obtained by the … hospital shall be
confidential, as provided by law, and
otherwise may not be disclosed without
written consent of the health care professional.” 410 ILCS 517/15(h). The Data
Collection Act goes on to hold that
“[n]othing in [the above] Section prevents a … hospital from disclosing any
credentials data to … any committee of
the … hospital involved in the credentialing process, or accreditation bodies or
licensing agencies.” Id.
The Data Collection Act treats a
physician’s staff privilege file as credentials data collected by the hospital, and
therefore the physician’s staff privilege
file remains confidential. By standardizing the collection of credentials data by
health care entities, the Data Collection
Act “ensures accuracy, completeness, efficiency, and current information, which
in turn ensures that health care entities
correctly assess and validate the qualifications of health care professionals.”
Davis v. Kewanee Hosp., 2014 IL App
(2d) 130304, ¶ 48. Similar to the Medical Studies Act, as discussed below, the
Data Collection Act safeguards truthful
peer review by keeping credentials data
confidential. 410 ILCS 517/15(h). The
Data Collection Act, by advocating for
the “correct assessment and validation
of health care professionals’ qualifications benefits the general public, as
opposed to physicians, by ensuring that
About the Authors
Dina L. Torrisi is a partner
at HeplerBroom LLC. Ms.
Torrisi focuses her practice in the area of professional liability defense and
general negligence. She
has extensive litigation
experience in defending
hospitals, physicians, and
nurses. Ms. Torrisi received her B.S. from University of Illinois, Champaign-Urbana, and her
J.D. from The John Marshall Law School. She
is admitted to the bars of Illinois, the Northern
District of Illinois, and the U.S. Supreme Court.
Ms. Torrisi is a member of the Illinois Association
of Defense Trial Counsel and Illinois Association
of Healthcare Attorneys. She is also an Arbitrator for the Cook County Mandatory Arbitration
Program.
Zeke N. Katz is an associate attorney at HeplerBroom LLC. Mr. Katz
graduated from Colgate
University in 2006 with a
Bachelor of Arts degree
in Philosophy & Religion.
He received his J.D. from
Chicago-Kent College of
Law in 2014. He is admitted to practice in Illinois. He focuses his practice in the areas of
medical malpractice and insurance defense. He
is a member of the American Bar Association,
Illinois State Bar Association and Chicago Bar
Association.
only qualified health care professionals
treat patients.” Davis, 2014 IL App (2d)
130324, ¶ 48.
Medical Studies Act,
735 ILCS 5/8-2101 & 2102
Section 2101 of the Medical Studies
Act states that “[a]ll information, interviews, reports, statements, memoranda,
recommendations, letters of reference
or other third party confidential assessments of a health care practitioner’s
professional competence, … used in
the course of internal quality control …
shall be privileged, strictly confidential
and shall be used only for … granting,
limiting or revoking staff privileges or
agreements for services.” 735 ILCS
5/8-2101. Section 2102 of the Act states
that “[s]uch information … shall not be
admissible as evidence, nor discoverable
in any action of any kind in any court.”
735 ILCS 5/8-2102.
The purpose of the Medical Studies
Act mirrors that of the Data Collection
Act. In Frigo, the court stated the Medical Studies Act was enacted “to ensure
that members of the medical profession
can maintain effective professional selfevaluation and to improve the quality of
healthcare.” 377 Ill. App. 3d at 65. The
court acknowledged that the Medical
Studies Act advocates for physicians to
candidly and willingly disclose information. Id. The court reasoned that the
protections afforded under the Act lead to
honest and open disclosure that enhances
hospital conditions and patient care, and
lowers the rates of death and disease. Id.
Absent the Act’s peer-review privilege,
physicians would be less inclined to
evaluate their colleagues. Id.
Illinois courts have interpreted
the discoverability of a physician’s
application for staff privileges under the
The court reasoned that the protections afforded
under the Act lead to honest and open disclosure that
enhances hospital conditions and patient care, and
lowers the rates of death and disease. Absent the
Act’s peer-review privilege, physicians would be less
inclined to evaluate their colleagues.
Medical Studies Act in a variety of ways.
In Zangara v. Advocate Christ Medical
Center, the court narrowed the subject
matter privileged by the Medical Studies
Act, finding that the “Act is not intended
to shield hospitals from potential liability, and only documents generated
specifically for the use of a peer-review
committee receive protection under the
Act.” 2011 IL App (1st) 091911, as modified on denial of reh’g, July 22, 2011.
In Frigo, the court went further,
finding that even information acquired
by a peer-review committee may be discoverable under the Medical Studies Act.
377 Ill. App. 3d at 65. The Frigo court
delineated this separation of discoverable
and non-discoverable documents as being a chronological distinction, finding
that the Act “does not protect against
the discovery of information generated
before the peer-review process begins
or information generated after the peerreview process ends.” Id.
For example, in Menoski v. Shih,
the court found that because physicians’
applications for privileges are created
before the peer-review process, those
documents are not privileged under
the Act. 242 Ill. App. 3d 117, 120 (2d
Dist. 1993). Likewise, the court held
that a committee’s actions following
the peer-review process were also not
privileged under the Act. Id. at 121. In
Willing v. St. Joseph Hospital, the court
correspondingly found that a physician’s
“applications for appointment and
letters of resignation or withdrawal are
either antecedent or subsequent to the
peer-review process … [and] only action
taken during the peer-review process are
protected under the Act.” 176 Ill. App. 3d
737, 743 (1st Dist. 1988).
In a slightly different approach
to determining discoverability under
the Medical Studies Act, the court in
Ardisana v. New Community Hospital,
Inc. separated the ultimate results of
peer-review committees, which are
discoverable, from “recommendations
and internal conclusions of peer-review
committees, which may or may not
lead to those results” and are therefore
privileged. 342 Ill. App. 3d 741, 747
(1st Dist. 2003). The Ardisana court
noted that “the plain language of the
Medical Studies Act provides that
‘recommendations’ used in the course
of internal quality control are to receive
its protection.” Ardisana, 342 Ill. App.
3d at 747. The court found that minutes
from the committees “in which plaintiff’s
case is discussed self-evidently constitute
‘investigative and deliberative materials
generated by a hospital committee in
formulating its recommendations,’” and
are “therefore privileged under the Act.”
Medical Malpractice | continued
Id. at 748-49 (citing Green v. Lake Forest
Hospital, 335 Ill. App. 3d 134, 138 (2d
Dist. 2002)). The court concluded that
where a document “establishes, by its
own content, that it served an integral
function in the peer-review informationgathering and decision-making process,”
that document is not discoverable under
the Medical Studies Act. Id. at 748-49.
Applying the temporal distinction
to documents within a physician’s staff
privilege file drastically limits those
documents that may be privileged under
the Medical Studies Act. Conversely,
the Ardisana court’s interpretation of
privileged documents focuses on the
document’s function in the peer-review
process, resulting in a wider range of
documents found to be privileged under
the Act.
Illinois Supreme Court
Rule 201(b)(1)
Illinois Supreme Court Rule 201(b)
(1) states that “a party may obtain by
discovery full disclosure regarding any
matter relevant to the subject matter
involved in the pending action, whether
it relates to the claim or defense of the
party seeking disclosure or of any other
party” (emphasis added). Rule 201(b)
(1) provides plaintiffs with a compelling means to access a physician’s staff
privilege file in a negligent credentialing
cause of action. Rule 201(b)(1) “has
been interpreted to allow discovery of
all information that would be admissible
at trial as well as information which is
reasonably likely to lead to admissible
evidence.” Klaine, 2014 IL App (5th)
130356, ¶ 14 (citing Manns v. Briell, 349
Ill. App. 3d 358, 361 (4th Dist. 2004)). In Willing, a first district decision,
the court found that under Rule 201(b)
(1), “considerable latitude is permitted
during discovery.” 176 Ill. App. 3d at
744. The documents at issue in Willing
were the restrictions and revocations
of a physician’s staff privileges. Id. In
analyzing the discoverability of these
documents, the Willing court emphasized
that while the defendant contended that
those documents would be inadmissible at trial to establish negligence,
as evidence of subsequent remedial
measures, those documents may contain
information which is reasonably likely
to lead to admissible evidence, and was
therefore discoverable as being relevant
under Rule 201(b)(1). Id. at 745.
The diverse decisions regarding
the discoverability of physicians’ staff
privilege files by various courts and
districts in Illinois may finally be settled
by the pending Illinois Supreme Court
decision in Klaine.
Klaine v. Southern Illinois Hospital
Services
In Klaine, the plaintiff seeks access
to a physician’s staff privilege file via
written discovery in order to satisfy the
first element of a negligent credentialing claim, that the defendant hospital
improperly granted staff privileges to
an unqualified physician. The plaintiffs
filed their amended complaint on August
20, 2012 in Williamson County, alleging medical malpractice and negligent
credentialing. Klaine, 2014 IL App (5th)
130356, ¶ 5. In pursuit of their negligent
credentialing claim, plaintiffs sought the
staff privilege file of the physician whom
they claimed the hospital had negligently
credentialed. Id.
The plaintiffs in Klaine filed a
motion to compel production of the
physician’s staff privilege file on March
18, 2013. In response to the plaintiffs’
motion to compel, the defendant hospital
pursued an order of friendly contempt.
Id.On July 9, 2013, the circuit court
found the defendant hospital to be in
contempt of court for failing to produce
the physician’s staff privilege documents.
The defendant hospital responded by
filing an interlocutory appeal, under IL
S.Ct. Rule 304 (b)(5), arguing in part
that: (i) the physician’s staff privilege
file was privileged under section 15(h) of
the Data Collection Act; (ii) information
within the physician’s staff privilege file
should be redacted pursuant to the Medical Studies Act; and (iii) the physician’s
staff privilege file, submitted after the
patient’s treatment, was irrelevant under
IL S.Ct. Rule 201(b). Id. ¶ 6.
In response to the defendant hospital’s interlocutory appeal, the Appellate
Court of Illinois, Fifth District, issued
its opinion on August 6, 2014, holding
that: (i) the physician’s staff privilege
file was not privileged under the Data
Collection Act; (ii) while references to
a peer review evaluation report within
the physician’s staff privilege file were
privileged under the Medical Studies Act,
that physician’s history and summary of
procedures, also within the physician’s
staff privilege file, were not privileged
under the Medical Studies Act; and
(iii) the physician’s staff privilege file,
submitted after the patient’s treatment,
was relevant in a negligent credentialing
cause of action. Id. ¶ 3.
Data Collection Act Analysis
in Klaine
The Fifth District Appellate Court
in Klaine found that a physician’s staff
privilege file is discoverable under
the Data Collection Act. The court
differentiated between a physician’s
staff privilege file being confidential,
rather than privileged. The court noted
that the Medical Studies Act explicitly
specifies discoverability, while the Data
Collection Act remains silent on that
issue. The court found that “there is no
general principle under Illinois law that
provides that information that is otherwise discoverable is privileged because
it is confidential.” Klaine, 2014 IL App
(5th) 130356, ¶ 17 (citing People ex rel.
Birkett v. City of Chicago, 292 Ill. App.
3d 745, 753 (2d Dist. 1997)).
The Fifth District Appellate Court
held that absent an explicit provision
in the Data Collection Act, applications
for staff privileges may be confidential,
but are not privileged from discovery.
Klaine, 2014 IL App (5th) 130356,
¶ 20. In contrast, in TTX Co. v. Whitley,
the First District Appellate Court found
that although the Illinois Income Tax
Act did not contain language stating that
information in tax returns is privileged,
it did require confidentiality of that
information, and therefore did not
create an exception for disclosure. 295
Ill. App. 3d 548, 556 (1st Dist. 1998).
The Klaine court criticized the TTX Co.
court for holding that tax information
was nondiscoverable, even where there
was no provision in the Illinois Income
Tax Act specifying inadmissibility in
court. Klaine, 2014 IL App (5th) 130356,
¶ 19 (citing TTX Co., 295 Ill. App. 3d
at 556). Whether a statute must explicitly mandate that certain information is
privileged from discovery, rather than
being confidential, may be clarified in
the Illinois Supreme Court’s pending
opinion in Klaine.
Medical Studies Act Analysis
in Klaine
While the purposes of the Data
Collection and Medical Studies Acts
may be analogous, the Klaine court’s
application of each act is markedly different. The Klaine court found that unlike
the Data Collection Act, the Medical
Studies Act is clear in its designation of
nondiscoverability. Klaine, 2014 IL App
(5th) 130356, ¶ 18. Instead, at issue in the
analysis of a physician’s staff privilege
file under the Medical Studies Act, is
which portions of that file are considered
to be “used in the course of internal
quality control.” Ardisana, 342 Ill. App.
3d at 747. The Klaine court held that
within the physician’s staff privilege file,
references to a peer review evaluation
report were privileged under the Medical
Studies Act, while a history and summary
of the physician’s procedures were not
privileged under the Act. Id. ¶¶ 20, 24.
In Klaine, the discoverability of
the physician’s Focused Professional
Practice Evaluation (FPPE) was analyzed. The FPPE was created for and
reviewed by a committee that supervised
peer-review committees and established
methods for the assessment and development of physician performance. Id. ¶ 23.
The Klaine court found that because this
FPPE was created at the request of a peerreview committee, and was within their
process, the findings of the FPPE were
privileged under the Medical Studies Act.
Id. ¶ 24. The court limited this holding
by noting that apart from the FPPE,
additional information regarding the
revisions of that physician’s application
for staff privileges was not privileged
under the Act. Id.
The Klaine court also found that
no privilege exists under the Medical
Studies Act for documents identified as
procedure summaries or surgeon case
histories. Id. ¶ 38. The Klaine court found
that although those documents were
furnished to peer-review committees,
that conveyance did “not transform the
information, which is otherwise discov-
erable, into privileged information.” Id.
¶ 39. Instead, the Klaine court found that
where documents lack any consideration
of a physician’s performance, and are not
generated by a peer-review committee,
those documents are not privileged under
the Medical Studies Act. Id.
Rule 201(b)(1) Analysis in Klaine
In addition to employing the Data
Collection and Medical Studies Acts,
the defendant hospital in Klaine argued
that the physician’s application for staff
privileges was irrelevant to the plaintiff’s
negligent credentialing claim, because
that physician’s application was tendered
after the plaintiff’s treatment at issue in
the complaint. Id. ¶ 14. The Klaine court,
under an abuse of discretion standard
of review, found that information in the
physician’s staff privilege file could be
information that is reasonably likely
to lead to admissible evidence of the
plaintiff’s allegations regarding her care
and treatment by the physician. Id. As
such, the defendant hospital was unable
to use Rule 201(b)(1) as a shield from
the plaintiffs’ discovery request for the
physician’s staff privilege file.
Conclusion
As practitioners, we should be
aware of the grounds available to keep
physicians’ privilege files protected from
discovery in order to defend negligent
credentialing claims, as well as uphold
the reason behind such safeguards – encouragement of the honest peer-review
of physicians. Given the various ways
in which Illinois courts have addressed
discoverability of physicians’ privilege
files, it is uncertain whether the Illinois
Supreme Court will affirm the approach
taken by the fifth district in Klaine.
Feature Article
Aimee K. Lipkis
Cray Huber Horstman Heil & VanAusdal LLC, Chicago
The Abused Respondent
in Discovery Statute
The respondent in discovery statute,
codified at 735 ILCS 5/2-402, permits
plaintiffs in any civil action to name
those “respondents believed to have
information essential to the determination of who should properly be named
as additional defendants in the action.”
735 ILCS 5/2-402. The statute allows
plaintiffs to obtain unilateral, unlimited
discovery from non-parties and tolls
the statute of limitations for at least six
months. Id. It states:
Unfortunately, the RID statute is
frequently abused and not applied as the
legislature intended. This article will
address some of these misuses including
extensions of time to convert RIDs, how
the statute is used to pressure physicians
to testify against each other, payment
for the RID physician, and proposed
legislation related to the RID statute.
Finally, thoughts for defense lawyers
who are representing RID physicians
are outlined. A person or entity named as
a respondent in discovery in
any civil action may be made a
defendant in the same action at
any time within 6 months after
being named as a respondent in
discovery, even though the time
during which an action may
otherwise be initiated against
him or her may have expired
during such 6 month period.
Extensions of Time
to Convert the RID
735 ILCS 5/2-402. In 1976, the respondent in discovery statute was enacted to
protect physicians (Transcript of proceedings, House of Representatives, June
10, 1976, p. 35). It was designed as a way
for a physician to avoid the stigma and
financial stress of being named as a party
to a lawsuit because a physician named
as a respondent in discovery would not
need to notify his/her malpractice insurance carrier or hospital credentialing
committees unlike a physician who was
a named defendant.
When the statute was originally
enacted, it did not provide for any
extensions of time beyond the original
six-months and so the physician knew
in six months whether he was “in” or
“out” of the lawsuit. 735 ILCS 5/2-402
(1982). In 2004, the court in Robinson v.
Johnson, 346 Ill. App. 3d 895 (1st Dist.
2004), strictly construed the statute and
held that a trial court “may not extend
section 2-402’s six-month period during
which a respondent in discovery may be
made a defendant.” Robinson, 346 Ill.
App. 3d at 898. The Robinson court noted
that the six-month period begins to run
when the complaint is filed. Id.
But times have changed, and what
was originally created to protect physicians from the spiraling costs of medical
malpractice insurance has increasingly
been used against them. Subsequent to
the holding in Robinson, in 2006, the
General Assembly amended section
2-402 to allow courts to grant plaintiffs
one 90-day extension for good cause
and additional extensions only if the
respondent had failed to comply with
discovery. The current version of the
respondent in discovery statute states in
pertinent part:
An extension from the original
6-month period for good cause
may be granted only once for
up to 90 days for (i) withdrawal
of plaintiff’s counsel or (ii)
good cause. Notwithstanding
the limitations in this Section,
the court may grant additional
reasonable extensions from this
6-month period for a failure or
refusal on the part of the respondent to comply with timely filed
discovery. . . .
735 ILCS 5/2-402.
Despite statutory language expressly
providing only one 90-day extension for
good cause, in practice, courts routinely
allow multiple extensions beyond the 90day limit for good cause. Other than the
one 90-day extension, the statute allows
the court to use its discretion to order
“reasonable extensions” beyond the six
month period only if there is “a failure
or refusal on the part of the respondent to
comply with timely filed discovery.” Id.
About the Author
Aimee K. Lipkis is an
attorney at Cray Huber
Horstman Heil & VanAusdal LLC focusing her practice in the area of medical
malpractice defense. She
received her Juris Doctorate from Michigan State
University College of Law
in 2009. She is a member of the IDC.
There are no reported decisions
analyzing whether the failure of one
respondent in discovery to answer
discovery can extend the conversion date
for another respondent who has complied
with discovery. However, the RID statute
is considered a special statutory cause
of action. Hugley v. Alcaraz, 144 Ill.
App. 3d 726, 733-34 (1st Dist. 1986).
Courts have, therefore, routinely held
that “when a plaintiff is proceeding on
a special statutory cause of action, …
all of the requirements mandated in the
statute” must be scrupulously observed.
Robinson, 346 Ill. App. 3d at 903. Thus,
based on the plain language of the statute
(“failure of the respondent”), the failure
of one respondent in discovery to answer
discovery or sit for his deposition, should
not delay plaintiffs’ conversion date for
another respondent in discovery who
has complied with all discovery. Nevertheless, plaintiffs frequently use the
failure of one RID to answer discovery
to request an extension of the conversion
deadline as to all RIDs and these requests
are frequently granted. Plaintiffs also
frequently request time for their expert
consultants to review the deposition transcripts of all respondents in discovery in
order to determine whether to move to
convert the RIDs. If one 90-day extension has already been granted for good
cause, a “review of transcripts” is not a
reason for an extension, as neither the
statute nor case law permit it.
RID Physicians—Save Themselves
The RID statute provides a plaintiff
with unfettered discovery. There is no
authority that sufficiently narrows the
inquiries to a RID physician. Illinois
courts have held that plaintiffs can
proceed with converting RIDs to defendants even without issuing discovery
Illinois courts have held that plaintiffs can proceed with
converting RIDs to defendants even without issuing
discovery or taking the RID’s deposition. Consequently,
plaintiffs can use the respondent in discovery statute as
a tool for simply tolling the statute of limitations
and/or statute of repose against certain individuals
and entities without ever issuing discovery.
or taking the RID’s deposition. Long v.
Mathew, 336 Ill. App. 3d 595, 602 (4th
Dist. 2003); Torley v. Foster C. McGaw
Hosp., 116 Ill. App. 3d 19, 21 (1st Dist.
1983). Consequently, plaintiffs can
use the respondent in discovery statute
as a tool for simply tolling the statute
of limitations and/or statute of repose
against certain individuals and entities
without ever issuing discovery.
In a medical malpractice case,
however, the statute is typically used
in a different manner. Many times,
plaintiffs will name several physicians
as RIDs in hopes that they will criticize
each other at their depositions. In the
Illinois Trial Lawyers Association’s
Medical Malpractice Notebook, one of
the reasons stated for naming RIDs is
that “the respondent physician will be
much more willing to provide honest
testimony, rather than testimony that
will speciously attempt to assist a
defendant or other health care provider.”
Illinois Trial Lawyers Association,
Medical Malpractice Notebook 324
(Keith Hebeisen, 2014). That is certainly plaintiffs’ perspective. From the
defendants’ perspective, the RID statute
is being used to coerce RID physicians
into testifying against the defendant
medical providers and other RIDs under
the threat of themselves being converted
to defendants. The statute’s scope is not
limited to those who may be converted
to defendants, as the statute allows
plaintiffs to name RIDs whom plaintiffs
have no intention of converting to
defendants. As plaintiffs’ attorneys
know, finger pointing by physicians in
a medical malpractice case can lead to
a difficult defense and an earlier and
larger settlement for the plaintiff.
Paying the RID Physician
Section 2-402 also provides:
“[e]ach respondent in discovery shall be
paid expenses and fees as provided for
witnesses.” Illinois Supreme Court Rule
204 governs depositions of physicians
and states that: The discovery depositions of
nonparty physicians being
deposed in their professional
capacity may be taken only with
the agreement of the parties and
the subsequent consent of the
deponent or under a subpoena
issued upon order of court. A
party shall pay a reasonable fee
to a physician for the time he or
Feature Article | continued
she will spend testifying at any
such deposition. . .
Ill. S. Ct. R. 204(c).
The court in Delestowicz v. Labinsky,
288 Ill. App. 3d 637, 638-39 (1st Dist.
1997), held that “a lawsuit naming an
individual as a respondent in discovery
is not an action against that individual
and the individual is not a party to that
action.” Delestowicz, 288 Ill. App. 3d at
639. Yet, plaintiffs frequently claim that
a respondent in discovery physician is
not entitled to fees beyond the statutory
witness fee for his/her deposition. In support of their claim, plaintiffs rely on the
committee comments to Illinois Supreme
Court Rule 204(c). The committee comments to subpart (c) state:
[P]aragraph (c) is made applicable only to ‘nonparty’
physicians. The protection afforded a physician by paragraph
(c), including the payment of a
fee for time spent, has no application to a physician who is a
party to the suit. Such protection
should likewise be unavailable
to nonparty physicians who
are closely associated with a
party, such as physicians who
are stockholders in or officers
of a professional corporation
named as a defendant, or a
physician who is a respondent
in discovery.
Ill. S. Ct. R. 204(c) cmt (1995).
Further, in Buckholtz v. MacNeal
Hosp., 313 Ill. App. 3d 521 (1st Dist.
2000), the court held that the Illinois
Supreme Court Rules unambiguously
require that a nonparty physician who is
deposed be paid a reasonable fee for time
spent testifying, even if the physician is
closely associated with one of parties.
Buckholtz, 313 Ill. App. 3d at 525-26.
In Buckholtz, the non-party physician
had treated the plaintiff while she was
a resident at the defendant hospital. The
court further noted that extrinsic matter
such as committee comments must not
be considered unless it is first determined
that the rule’s language is ambiguous. Id.
at 526. The Illinois Supreme Court has
further held that committee comments to
the rules are not binding and are not part
of the rule. People v. De Filippo, 235 Ill.
2d 377 (2009). Moreover, the comments
are contradictory, first stating that nonparty physicians are entitled to a fee, and
then creating a class of non-party physicians whom are allegedly not entitled to
such a fee. Ultimately, whether a RID
physician is entitled to a reasonable fee
may depend on which judge is presiding
over the matter. To that end, many RIDs do not
request compensation for their deposition
in hopes that their free testimony will
lessen the likelihood that they will be
converted to a defendant. Once a plaintiff
moves to convert the RID, an invoice
for the deposition is generally sent at
that time.
Proposed Legislation for
Section 2-402
The current version of Section 2-402
requires RIDs to “respond to discovery
by the plaintiff in the same manner as
are defendants and may, on motion of
the plaintiff, be added as defendants if
the evidence discloses the existence of
probable cause for such action.” 735
ILCS 5/2-402. Illinois courts have held
that probable cause is that “evidence that
would engender, in an ordinarily cautious
and prudent person, an honest and strong
suspicion that the respondent’s alleged
breach of the applicable standard of care
was the factual and legal cause of the
plaintiff’s injury.” Froehlich v. Sheehan,
240 Ill. App. 3d 93, 102 (1st Dist. 1992).
The Froehlich court further held that an
unsigned, unsworn and undated section
2-622 report could not provide the basis
for conversion, as it was not evidence of
probable cause. Froehlich, 240 Ill. App.
3d at 102-103.
The primary intent of the legislature’s enactment of the respondent in
discovery statute was to protect physicians; yet, efforts are now being taken
to amend the statute to be even less
protective of physicians. The proposed
amendment of section 2-402, which was
introduced on January 14, 2015, lowers
the burden of proof required to convert a
RID to a defendant. The new legislation
will allow plaintiff, on motion, to add the
RIDs as defendants, if “a preponderance
of the evidence discloses cause for such
action,” rather than the former requirement that the evidence must disclose
the existence of probable cause for such
action. H.B. 96, 99th Gen. Assembly,
(Ill. 2015). It further proposes that
RIDs be required to answer requests for
admission of facts or of genuineness of
documents. This change is likely due to
a number of attorneys for RIDs objecting
when requests to admit were propounded
on their RID clients.
Considerations When
Representing a RID
When plaintiffs name RIDs in a
medical malpractice action, it alters the
sequence of discovery and accelerates
the timing in which the discovery occurs. The normal sequence without the
inclusion of RIDs would be to answer the
plaintiff’s complaint, exchange answers
to written discovery, obtain all of plain-
Property Insurance Law
tiff’s pre-occurrence, occurrence, and
post-occurrence medical records, retain
an expert consultant to review the matter,
take the plaintiff’s deposition, present
the defendants for depositions, and then
depose the treating physicians. When
RID physicians are named in a medical
malpractice action, defense attorneys
are forced to take RIDs’ depositions
first without having taken the plaintiff’s
deposition and without having obtained
the plaintiff’s pre-occurrence and postoccurrence medical records. Usually, an
expert consultant has not been retained
at the time of the RIDs’ depositions.
Consequently, the RID can be placed at
a significant disadvantage.
Section 2-402 allows a RID, upon
his/her own motion, to be made a
defendant in the action. While it is unconventional to do so, it may ultimately
benefit the RID, especially if the RID is
going to be converted anyway, if it can
prevent the RID from having to give a
deposition until later in the case. Defense
lawyers should consider whether their
clients are better served by converting
their RID clients to defendants, thereby
taking away plaintiff’s weapon in medical malpractice cases. Defense lawyers
should consider the likelihood of conversion, the facts at issue, the involvement
of the RID, the statute of limitations, the
statute of repose and the court and judge
presiding over the case when deciding
how to proceed. Unfortunately, this
statute which was created with the intent
to protect physicians, often does nothing
but harm them.
Catherine A. Cooke
Robbins, Salomon & Patt, Ltd., Chicago
“Completed Work” Exclusion Bars
Insurance Coverage for Condominium
Board’s Suit against Developer for
Faulty Construction Work
The facts of Nautilus Insurance
Co. v. Board of Directors of Regal Lofts
Condominium Association, a late 2014
Seventh Circuit Court of Appeals ruling
regarding coverage, are not altogether
unusual. A condominium board sued the
developer of the condominium project
based on allegedly faulty construction
work which caused water infiltration in
owners’ condominium units. Nautilus
Ins. Co. v. Bd. of Directors of Regal
Lofts Condo. Ass’n, 764 F.3d 726 (7th
Cir. 2014). However, the court’s analysis
of several recurring issues in property
insurance jurisprudence is of interest to
those in this practice area.
Policy Language
In 1998, individuals formed a limited
liability company (the “Developer”) to
renovate and convert a building located
at 1735 West Diversey Parkway into
condominiums called the Regal Lofts.
Nautilus Ins. Co., 764 F.3d at 728. The
Developer purchased two Commercial
Lines Policies from Nautilus, identical
for purposes of this discussion, which
covered bodily injury and property damage liability. Id. The insurance applied to
“bodily injury” and “property damage”
only if caused by an “occurrence” which
occurred during the policy period.
“Property Damage” included physical
injury to tangible property or loss of use
of tangible property that is not physically
injured. Id. An “occurrence” was defined
as “an accident, including continuous or
repeated exposure to substantially the
same general harmful conditions.” Id.
The policies contained three relevant
exclusions. First, they excluded property
damage to “that particular part of real
property on which you or any contractors
or subcontractors working directly or
indirectly on your behalf are performing operations if the ‘property damage’
arises out of those operations.” Id. at
729. A second exclusion took property
damage to “that particular part of any
property that must be restored, repaired
or replaced because ‘your work’ was
incorrectly performed on it” outside the
scope of coverage. Id.
About the Author
Catherine A. Cooke is a
shareholder at Robbins,
Salomon & Patt, Ltd. and
concentrates her practice
in the area of commercial
litigation and creditors’
rights. She earned her
undergraduate degree
from Indiana University–
Bloomington in 2003, and
law degree from The John Marshall Law School
in 2006, where she served as Administrative
Editor of The John Marshall Law Review. She
is licensed to practice law in both Illinois and
Indiana.
Property Insurance Law | continued
Finally, both policies had an endorsement entitled “Exclusion-ProductsCompleted Operations Hazard” which
provided that the insurance did not apply
to property damage included within
the “products-completed operations
hazard.” The exclusion encompassed
“all ‘bodily injury’ and ‘property damage’ occurring away from premises you
own or rent and arising out of ‘your
product’ or ‘your work’ except products
that are still in your physical possession
or work that has not yet been completed
or abandoned.” Id.
The policies deemed “your work”
to be completed at the earliest of the
following:
(1) When all of the work called for in
your contract has been completed;
(2) When all of the work to be done at
the site has been completed if your
contract calls for work at more than
one site; or
(3) When that part of the work done at a
job site has been put to its intended
use by any person or organization
other than another contractor or
subcontractor working on the same
project.
The policies further provided that work
that may need service, maintenance,
repair, or replacement but which is
otherwise complete will be treated as
completed. Id.
Underlying Construction Defect
Lawsuit
Construction of the Regal Lofts was
completed in 2000 and on July 27, 2000,
the Developer transferred control of the
condo association to the owner-elected
Board but the Developer still owned
11 units. Id. As early as May 2000, one
homeowner was aware of water damage
issues, and in November 2000, another
owner also complained about experiencing water leakage into his unit for several
months each time it rained. Id. In 2005,
the Board hired a building consulting firm
to survey the building and investigate the
cause of the leakage. The investigation
found that the exterior brick masonry
walls were not fully waterproofed and
concluded based on the nature of the
damage that the condition had developed
over many years, including prior to the
condo conversion, but that the current
water infiltration was due to inadequate
restoration of the walls to a water-tight
condition. Id.
The Board sued the Developer
in Illinois state court in January 2008
alleging that the Developer failed to
properly construct the exterior walls,
requiring rebuilding or repair. Id. The
Developer promptly tendered the suit to
Nautilus and requested it to indemnify
the Developer and defend the suit. Id.
at 730. Nautilus denied coverage under
both policies. In June 2008, the Board
amended its original complaint to add a
negligence count, which amended complaint was also tendered with Nautilus
again denying coverage. Id.
In August 2009, the Board filed a
second amended complaint to detail the
alleged negligence with more specificity,
claiming for the first time that the negligence had caused damage to personal
property in the building in addition to the
interior of the building itself. Id. Again,
the Developer tendered the complaint
to Nautilus requesting coverage. In
response, Nautilus filed a declaratory
judgment action against the Developer
and the Board in Illinois federal court.
In its answer, the Developer asserted
affirmative defenses including estoppel,
and counterclaimed against Nautilus
claiming it had breached its duty to
defend in the state court action. Id.
Damage to Work itself is
Not an “Occurrence”
The Developer filed a motion for
summary judgment, which was denied
on several grounds. The district court
found that the initial and first amended
complaints did not give rise to a duty
to defend by Nautilus because in order
for a construction defect to be classified
as an “occurrence” it must damage
something other than the project itself.
Id. Because the first two complaints
only alleged damage to the building
itself, it was only the second amended
complaint that alleged damages to
personal property such that it could have
potentially fallen within the scope of
the policies’ coverage. Id. The district
court held that Nautilus correctly argued
that the products-completed operations
hazard exclusion applied to the personal
property damage alleged in the second
amended complaint.
Thereafter, in June 2011, the Board
settled with the Developer and the
Developer assigned its rights against
Nautilus to the Board. The Board then
stepped in to defend against Nautilus’
motion for summary judgment and for
purposes of appeal. In March 2012, the
district court granted summary judgment
in favor of Nautilus. As with the prior
decision on summary judgment, the court
found that the water damage was not an
“occurrence’ under Nautilus’ policies because Illinois law provides that damage
to a construction project resulting from
faulty workmanship is not an “accident.”
It also held that the products-completed
operation hazard exclusion applied to
the personal property damage alleged
in the last version of the complaint and
THE IDC MONOGRAPH:
From Envirodyne and Beyond:
The Use of Extrinsic Evidence to Defeat and
Create a Duty to Defend in Illinois
John D. Hackett
Jamie L. Hull
Seth D. Lamden
Neal, Gerber & Eisenberg, LLP, Chicago
Mollie N. Werwas
Kopon Airdo LLC, Chicago
Daniel J. Berkowitz
Kopon Airdo LLC, Chicago
IDC QUARTERLY | Volume 25 Number 3
From Envirodyne and Beyond:
The Use of Extrinsic Evidence to Defeat
and Create a Duty to Defend in Illinois
A commercial general liability
insurer must defend any suit seeking
covered damages, regardless of the
likelihood that the insured ultimately will
be held liable for such damages based on
adjudicated facts. The standard for determining when the duty to defend arises is
well-established in Illinois: An insurer
must defend if any allegations of fact in
the underlying complaint are “potentially
within” the scope of coverage, even if
such factual allegations are “groundless,
false or fraudulent.”1 An insurer may not
refuse to defend “unless it is clear from
the face of the underlying complaint that
the allegations fail to state facts which
bring the case within, or potentially
within, the policy’s coverage.”2
The duty to defend arises as soon as
the insurer has notice that damages are
sought and, once triggered, continues “as
long as any questions remained concerning whether the underlying claims were
covered by the policies.”3 In other words,
an insurer with a duty to defend must
continue to defend until the underlying
action is completely resolved or until a
court enters a declaratory judgment in
favor of the insurer finding no further
duty to defend.4 Although the duty to
defend analysis always starts with the
allegations of the underlying complaint,
Illinois courts often will consider certain
types of evidence not pleaded in the
underlying complaint in a declaratory
judgment action regarding the duty to
defend.
Illinois courts recognize two exceptions to the general rule that the duty to
defend is based solely on the allegations
of the underlying complaint. First, an
insurer that learns of true but unpleaded
facts not alleged in the underlying
complaint must defend if those facts,
when considered with the allegations
in the complaint, indicate that the claim
About the Authors
John D. Hackett is a partner
and member of the Executive
Committee of Cassiday Schade
LLP, concentrating his practice
in insurance coverage litigation.
Mr. Hackett has extensive experience in complex insurance coverage disputes. He has a wide
variety of clients and is responsible for all aspects
of the insurance practice, including the preparation
of complex opinion letters, all phases of declaratory judgment litigation, and regulatory/underwriting matters. Mr. Hackett is the Chair of the IDC
Insurance Law Committee. Mr. Hackett has been
recognized by Law Bulletin Publishing Company as
a Leading Lawyer since 2012. Mr. Hackett received
his Chartered Property and Casualty Underwriters
(CPCU) designation in 1999 and Associate in Risk
Management (ARM) designation in 2000.
Jamie L. Hull is a partner with
Cassiday Schade LLP, where
she concentrates her practice
in the area of insurance coverage litigation, including broker/
agent professional liability
matters, business litigation and
appellate matters. Ms. Hull has
represented insurance companies, corporations and individuals in a variety of
insurance and business matters in both federal and
state courts. She has extensive experience with risk
retention groups, self-insured retentions and all types
of insurance policies including commercial general
liability, disability, professional liability, employer’s
liability, excess/umbrella and personal lines. Ms. Hull
received her J.D. from The John Marshall Law School
and is a graduate of Miami University, where she received her B.A. in Political Science and Spanish with
a minor in Latin American Studies.
Seth D. Lamden is a litigation partner at Neal, Gerber
& Eisenberg LLP in Chicago.
He concentrates his practice
on representing corporate and
individual policyholders in coverage disputes with their insurers.
In addition to dispute resolution,
Mr. Lamden counsels clients on
matters relating to insurance and
risk management, including maximizing insurance recovery for lawsuits and property damage, policy audits
and procurement, and drafting contractual insurance
specifications and indemnity agreements. He obtained
his B.A. from Brandeis University and his J.D., magna
cum laude, from The John Marshall Law School.
M-2 | IDC QUARTERLY | Monograph | Third Quarter 2015
Mollie E. Nolan Werwas is a
partner at Kopon Airdo LLC,
where she focuses her practice on insurance coverage,
complex tort litigation, nursing
home defense, and related
issues. She has represented
clients at the state and national level in matters involving
complex insurance coverage issues, including
personal injury claims, uninsured motorist claims,
business interruption claims, catastrophic property
losses and natural disaster losses. She received
her undergraduate degree from Southern Illinois
University in 2003, and her J.D. from Southern
Illinois University School of Law in 2006.
Daniel J. Berkowitz is an
associate attorney with Kopon Airdo LLC. His practice
primarily consists of complex
litigation, insurance coverage,
and property subrogation
matters. He graduated from
Boston College magna cum
laude with a B.A. in Political
Science in 2011 and graduated from Michigan
State University College of Law magna cum
laude in 2014.
is potentially covered.5 In other words,
an insured can use extrinsic evidence
to create the duty to defend even if the
allegations of the underlying complaint
were insufficient to do so. Second, an
insurer that brings a timely declaratory
judgment action may attempt to terminate its duty to defend with extrinsic
evidence of non-liability facts.6 For
example, a defending insurer may seek
a declaratory judgment holding that even
though the allegations of the underlying
complaint triggered the duty to defend,
nonliability facts (e.g., the insured failed
to pay premium on the policy) permit the
insurer to stop defending.
Given how broadly Illinois courts
interpret the scope of the duty to defend
to ensure that insureds receive the full
benefit of their “litigation insurance,”7
as the duty to defend sometimes is
called, these two exceptions make
sense. If an insurer is aware of true
but unpleaded facts indicating that an
underlying claim is potentially covered,
the insurer should not be able to avoid
its duty to defend simply because those
facts were not pleaded in the underlying complaint. Conversely, there is no
reason why an insurer with knowledge
of nonliability facts not pleaded in the
underlying complaint should not be able
to use those facts to terminate its duty
to defend, as long as an adjudication
in a declaratory judgment action based
on nonliability facts would have no
effect on the underlying case against
the insured.
As Illinois courts consider different
fact patterns, Illinois law regarding the
role that extrinsic evidence plays in the
duty to defend analysis continues to be
refined. This article is intended to assist
Illinois attorneys in understanding when
If an insurer is aware of true but unpleaded facts
indicating that an underlying claim is potentially
covered, the insurer should not be able to avoid its
duty to defend simply because those facts were not
pleaded in the underlying complaint.
and how extrinsic evidence can be used
to create or terminate the duty to defend.
This article also provides an overview of
the history of Illinois law on determining
the duty to defend, the current state of
the law on this issue, and the practical
application and implications of this
evolving body of case law.
An Insurer’s Knowledge of Facts
Showing That a Claim is
Not Covered Do Not Permit the
Insurer to Refuse to Defend
a Potentially Covered Claim
As in many states, Illinois courts
have consistently held that, when determining the duty to defend, the court must
look to the allegations of the complaint,
compare those allegations with the terms
of the insurance policy, and use only
the information contained within those
“eight corners” to determine whether
the insurer has a duty to defend.8 If the
allegations state a potentially covered
claim, the insurer must defend, and that
“duty to defend is not annulled by the
knowledge on the part of the insurer
the allegations are untrue or incorrect
or the true facts will ultimately exclude
coverage.” 9 As the court in Sims v.
Illinois National Casualty Co. stated,
“[t]he fact that the insurer is possessed
of information, whether obtained from
its insured or from other sources, which
may show the claim against the insured
... [is] outside the coverage of the policy
is ... of no consequence” for purposes of
determining the duty to defend.10 Thus,
when an insurer refuses to defend based
on evidence not alleged in the underlying
complaint, a court in a breach of contract
action brought by the insured will only
consider facts alleged in the underlying
complaint in evaluating whether the
insurer breached its duty to defend.
For example, the court in Clemmons
v. Travelers Insurance Co.11 held than
an insurer improperly refused to defend
its insured when it relied on facts not
alleged in the underlying complaint. In
Clemmons, Travelers refused to defend
its insured, Dennis Reed, against an
underlying lawsuit brought by Anthony
Clemmons for injuries caused by an
automobile accident. 12 The vehicle
was owned by Reed’s employer and
insured by Travelers. During Travelers’
investigation of the claim, Reed provided
Travelers with an unsworn accident
report stating that he was driving the
vehicle outside business hours.13 Based
on this report, Travelers denied coverage,
asserting that Reed was not a permissive
user of the vehicle at the time of the
accident.
Third Quarter 2015 | Monograph | IDC QUARTERLY | M-3
In ruling in favor of the insured, the court further
noted that, in giving his unsworn statements as part
of the accident report, Reed, as a layman,
was likely unaware of the legal principals governing
concepts like “permission” in the context of
vehicle use, and his interpretation of “permission”
as included in the accident report was “not enough
to dispel the potential for coverage raised
by Clemmons’ complaint.
After a default judgment was entered
against Reed, Clemmons sued Travelers
to collect the judgment. In that lawsuit,
Clemmons alleged that Travelers’ failure
to defend was a breach of contract. In
support of his argument, Clemmons
stated that his underlying complaint
against Reed had alleged that Reed was
the driver of the vehicle, and that Reed’s
employer owned the vehicle. The court
found that those allegations triggered
the duty to defend because they created
a clear possibility that Reed had permission to drive the vehicle at the time of
the accident.14 The court refused to allow
Travelers to rely on the unsworn report
to deny coverage, stating that “the duty
to defend must be determined solely
from the language of the complaint and
the policy.”15 In ruling in favor of the
insured, the court further noted that, in
giving his unsworn statements as part of
the accident report, Reed, as a layman,
was likely unaware of the legal principals
governing concepts like “permission” in
the context of vehicle use, and his interpretation of “permission” as included in
the accident report was “not enough to
dispel the potential for coverage raised
by Clemmons’ complaint.16
The court in National Union Fire
Insurance Co. v. Glenview Park District17
similarly refused to allow an insurer
to rely on information outside the four
corners of complaint to support a refusal
to defend its insured. Unlike Clemmons,
the insurer in Glenview Park District
wanted to use an Illinois statute that the
insurer, National Union, claimed should
be used when interpreting language in its
policy endorsement. The endorsement
at issue was used to add a third party
as an additional insured, and contained
a clause that excluded coverage for
“damages arising out of the negligence
of the insured.” Glenview Park District,
the additional insured under the policy,
was sued by an employee of the named
insured, NDS, following that employee’s
injury on the Park District’s property.
The employee asserted claims under both
common law negligence and the Structural Work Act. National Union filed a
declaratory judgment action in which
it denied that it had a duty to defend or
indemnify the Park District, claiming
that the employee’s allegations of the
Park District’s negligence precluded
coverage based on the endorsement’s
exclusionary language. National Union
argued that the language of the Structural
Work Act should be considered when
interpreting the word “negligence” in
the exclusionary phrase to find that the
Structural Work Act claim was simply
another form of a negligence claim
excluded by the endorsement. The court
disagreed, however, stating that the plain
language of the endorsement excluded
only common law negligence claims, and
not statutory claims.18 Again, the court
emphasized that the duty to defend can
be determine only through consideration
of the policy and complaint, and not
extrinsic information like a statute.
In Some Instances, an Insurer’s
Knowledge of True, Potentially
Covered Facts Not Pleaded in the
Underlying Complaint May Create
the Duty to Defend
Although an insurer’s knowledge of
facts outside the complaint cannot defeat
the duty to defend, such knowledge can
create the duty to defend. This rule is
referred to in Illinois as the “true-butunpleaded-facts doctrine,” and it was
first introduced in Associated Indemnity
Co. v. Insurance Co. of North America.19
As in Clemmons, the coverage dispute
in Associated Indemnity arose from an
automobile accident in which the driver of
the vehicle, Robert Blond, was denied defense by INA, the insurer for the vehicle’s
owner, Robinson.20 Unlike the complaint
in Clemmons, however, the complaint
filed against Blond and Robinson did
not, on its own, allege that Blond was
acting as an agent of Robinson sufficient
to trigger coverage for Blond under
Robinson’s policy.21 At the time the case
was tendered to INA, INA knew the true
but unpleaded facts that Blond was acting
as an agent of Robinson, which had been
provided to INA through communication
by Robinson immediately following the
accident. The court noted the holding in
Sims that prohibits an insurer from considering information outside the underlying
complaint to deny coverage, but stated
that those principals should not apply in
the converse situation where the insurer
knows of facts outside the complaint that
would bring the claim within coverage.22
As explained by the court:
Even though the complaint,
standing alone, may not fairly
apprise the insurer that the
third party is suing the putative
insured on an occurrence potentially within the policy’s coverage, the insurer is obligated to
conduct the putative insured’s
defense if the insurer has knowledge of true but unpleaded facts,
which, when taken together with
the complaint’s allegations,
indicate that the claim is within
or potentially within the policy’s
coverage.23
While this principle had not yet been
addressed by any Illinois courts, the
court noted that many other jurisdictions
had already applied the doctrine.24 The
court further reasoned that, “[t]o hold
otherwise would allow the insurer to
construct a formal fortress of the third
party’s pleadings and to retreat behind its
walls, thereby successfully ignoring true
but unpleaded facts within its knowledge
that require it, under the insurance
policy, to conduct the putative insured’s
defense.”25
Following Associated Indemnity, a
clear line of cases has developed in which
insurers have been required to defend
insureds based on facts found in sources
other than the underlying complaint,
including La Rotunda v. Royal Globe
Insurance Co.,26 where Royal Globe was
found to have a duty to defend based on
facts learned in its own investigation that
triggered coverage, but were not alleged
in the underlying complaint. Similarly,
in West Bend Mutual Insurance Co. v.
Sundance Homes, Inc., 27 West Bend
was required to indemnify its additional
insured, Sundance Homes, despite the
fact that the plaintiff’s complaint contained no allegations imputing liability
to Sundance as a result of conduct by
the named insured, a subcontractor,
which was a condition for triggering
Sundance’s defense as an additional
insured. West Bend’s duty to defend
was, nonetheless, triggered by statements
from the plaintiff’s co-workers indicating
that the named insured may have been at
fault, as well as Sundance’s third-party
complaint alleging negligence by the
named insured.28
In the 2008 case of American
Economy Insurance Co. v. Holabird and
Root,29 the Appellate Court, First District,
reaffirmed the need for insurers to
consider facts outside of the underlying
plaintiff’s complaint when determining
the duty to defend. In Holabird, the
underlying plaintiff sued the owner and
general contractor of a building after being injured by a fluorescent light fixture,
but did not allege any facts regarding
the electric subcontractor who installed
the fixture. The subcontractor’s carrier,
American Economy, denied coverage
for the general contractor, asserting
that the underlying complaint did not
allege any negligence by its named
insured, the electrical subcontractor,
to trigger American Economy’s duty
to defend. American Economy further
asserted that the general contractor’s
third-party compliant against the electric
subcontractor should not be considered
in determining the duty to defend. The
court, however, disagreed, explaining
that “consideration of a third-party complaint in determining a duty to defend is
in line with the general rule that a trial
court may consider evidence beyond the
underlying complaint if in doing so the
trial court does not determine an issue
critical to the underlying action.”30 As
the court reasoned, the trial court “need
not wear judicial blinders and may look
beyond the complaint at other evidence
appropriate to a motion for summary
judgment.”31
In rendering its decision, the Holabird court expressly distinguished its
situation from the 2002 ruling , National
Union Fire Insurance Co. v. R. Olson
Construction Contractors, Inc., in which
the Illinois Appellate Court, Second
District, relying on the “eight-corner
rule,” found that only the underlying
complaint and relevant policy provisions
should be considered in determining the
duty to defend.32 While the Holabird
court did identify differences in the
policy language at issue to distinguish the
cases, the court also simply rejected the
Second District’s analysis, stating that
“we do not agree with the court’s analysis
in National Union that a trial court
cannot consider anything other than the
underlying complaint and policy provisions in determining a duty to defend.”33
The Holabird court further pointed out
that American Economy had ample
information available to it, in addition
to the third-party complaint, for it to recognize that it’s named insured’s actions
contributed to the underlying plaintiff’s
injuries, even if the underlying plaintiff
was unaware of the subcontractor’s role
or identity.34 The court further relied on
the principals articulated in Associated
Indemnity that an insurer should not be
permitted to ignore facts known to it
simply because they are not included in
the underlying complaint.35
In the 2010 case of Pekin Insurance
Co. v. Wilson,36 the Illinois Supreme
Court endorsed the approach outlined
in Holabird, but suggested that Holabird
serves only as an exception to the general
“eight-corner rule.” Wilson was before
the court following the trial court’s entry
of judgment for Pekin on the pleadings,
in its declaratory judgment action.
The underlying suit at issue in Wilson
claim and other defenses claiming that
he was acting in self-defense against the
plaintiff, and Wilson tendered the suit to
Pekin for defense and indemnity. Pekin’s
policy excluded coverage for intentional
acts, but included a standard self-defense
exception to that exclusion. As part of
his summary judgment response in the
declaratory action, Wilson included his
counterclaim and affirmative defenses
from the underlying suit, as well as statements taken from him by Pekin where he
denied any intent to harm the plaintiff.
The supreme court found that Pekin
did have a duty to defend Wilson, despite
the fact that the underlying complaint
would, on its face, be outside the scope
of Pekin’s policy. Instead, the court found
that the case presented the type of “unusual or compelling circumstances” that
required the trial court to look beyond
the plaintiff’s complaint in determining
the duty to defend. The court reasoned
that the underlying plaintiff would have
no reason to allege that Wilson’s actions
were in self-defense. 37 Instead, the
[T]he outcome in Pulte may have been the same
even if the court’s analysis was limited to the
underlying complaint, but it further demonstrates the
willingness of Illinois courts to look not only to
pleadings, but also to other discovery and
evidence in finding a duty to defend.
involved allegations of assault, battery,
and infliction of emotional distress by
Jack Wilson, Pekin’s insured. In response
to that complaint, Wilson filed a counter-
policy’s self-defense exception could
only be triggered, and given meaning,
by looking beyond the complaint to
Wilson’s own pleadings, however self-
serving Pekin argued them to be.38
In Pekin Insurance Co. v. Pulte
Home Corp.,39 the Appellate Court, First
District, again considered additional information contained in documents other
than the underlying complaint and insurance policy in determining the insurer’s
duty to defend. As in Sundance Homes,
the coverage dispute in Pulte centered
on whether Pekin, the insurer for a
subcontractor, had a duty to defend Pulte
Home Corp., a general contractor, as an
additional insured. Pekin’s policy only
covered Pulte as an additional insured for
claims arising solely from the negligence
of the named insured subcontractor, and
the underlying complaint alleged that all
of the defendants, including Pulte, were
negligent in causing the plaintiff’s injury.
In ruling that Pekin did have a duty
to defend Pulte, the court looked at the
plaintiff’s answers to requests to admit,
the named insured’s answers to Pulte’s
counterclaim against it, and the contract
between Pulte and the named insured
subcontractor. As the court explained,
while the allegations of the underlying
complaint could result in Pulte being
independently liable, and therefore not
entitled to coverage from Pekin, the allegations did not preclude the possibility
that Pulte could be found liable solely as
a result of the acts or omissions of the
named insured subcontractor.40 The court
noted that the additional documents and
facts it considered raised the possibility
and, in fact, made it appear more likely,
that the named insured subcontractor
would be found solely liable to the
plaintiff, bringing the claims against
Pulte squarely within coverage.41 Thus,
the outcome in Pulte may have been the
same even if the court’s analysis was
limited to the underlying complaint, but
it further demonstrates the willingness
of Illinois courts to look not only to
pleadings, but also to other discovery
and evidence in finding a duty to defend.
Limits of the True-ButUnpleaded-Facts Doctrine
The “true-but-unpleaded-facts”
doctrine does not require insurers or
courts to consider all information provided by the insured, as seen in the
2002 case of Shriver Insurance Agency
v. Utica Mutual Insurance Co.42 At issue
in Shriver was an affidavit and letter that
the insured, Shriver Insurance Agency,
included as an exhibit to its summary
judgment motion in its declaratory judgment action. The affidavit was from
Shriver’s President, and the attached
letter was the President’s letter tendering the case to the insurer, Utica, and
outlining Shriver’s factual disagreements
and defenses to the allegations set forth
in the underlying complaint.43 The court
found that the “true-but-unpleaded facts”
doctrine did not warrant consideration
of the Affidavit and letter submitted by
Shriver. As the court explained, it “[did]
not believe that the doctrine was meant to
be applied to situations ... where the only
extraneous facts the insurer possessed
were supplied by the insured.”44 The
court reasoned that the insurer would
have no way of knowing whether the facts
offered by the insured were true unless it
conducts an independent investigation.
Rather, according to the Shriver court,
the doctrine should be applied where the
insurer not only possesses the extraneous
facts, but also knows them to be true.45
Ultimately, the court determined that,
even if the facts alleged in Shriver’s
submission were presumed true, those
[T]he appellate court asserted that Illinois remains
an “eight-corner state,” and the general rule in Illinois
requires coverage determinations to be based solely
on the four corners of the underlying complaint and
the four corners of the insurance policy.
facts did not change the coverage analysis
and Utica still had no duty to defend or
indemnify Shriver.
More recently, in the 2012 case
of Pekin v. Precision Dose, Inc.,46 the
Second District held that the trial court
was not required to consider facts set
forth in an affidavit submitted by the
insured in determining the insurer’s duty
to defend. Like Shriver, the underlying
complaint in Precision Dose involved
legal theories and factual allegations that
were outside the scope of Pekin’s policy.
Pekin denied coverage and the insured,
Precision Dose, filed a declaratory
judgment action. As part of its summary
judgment motion in the declaratory action, Precision Dose, for the first time,
submitted an affidavit from its president
setting forth facts that it believed
triggered coverage. That affidavit was
stricken by the trial court, and judgment
was entered in favor of Pekin.
The appellate court went through a
four-part analysis in affirming the trial
court’s decision to strike the insured’s
affidavit from the evidence considered
during summary judgment in the declaratory judgment action. First, the
appellate court asserted that Illinois
remains an “eight-corner state,” and the
general rule in Illinois requires coverage
determinations to be based solely on the
four corners of the underlying complaint
and the four corners of the insurance
policy.47 Cases like Wilson, according
to the Precision Dose case, demonstrate
that the “eight-corner” rule is a “general
rule,” and the “true-but-unpleaded-facts
doctrine” is an exception that permits a
court ruling on summary judgment in a
declaratory judgment action to consider
evidence usually considered in a summary judgment motion, so long as such
evidence does not tend to determine an
issue critical to the determination of the
underlying suit.48
The court then looked at the truebut-unpleaded facts doctrine, and noted
that the rule in Wilson merely permits,
but does not require, consideration of any
material outside the underlying pleadings
by the trial court. 49 Relying heavily
on Shriver, the Precision Dose court
explained that an insurer must defend an
insured only if the facts in the underlying
complaint give rise to coverage, unless
“the insurer possesses knowledge of
true but unpleaded facts that . . . indicate the claim is within or potentially
within coverage.”50 The Precision Dose
court emphasized the Shiver court’s
proclamation that the doctrine should
not apply in situations where the only
extraneous facts possessed by the insurer
were supplied by the insured, and the
insurer has no way of verifying the truth
of those facts without conducting its own
investigation.51 The Precision Dose court
went further, stating that “Shriver teaches
that unpleaded facts that the insured
gives the insurer should be viewed with
suspicion when determining the duty to
defend.”52 The court found that Pekin’s
decision to deny coverage was made
without any awareness of the facts in the
affidavit and that the insured knew those
facts but failed to disclose them to Pekin
until the summary judgment phase of the
declaratory judgment action.53 The court
explained the “eight-corner” rule must
focus on the complaint and the policy
because the insurer has to determine its
duty to defend at the outset of litigation.54
The court next considered whether
the underlying complaint and pleadings
were ambiguous, and, therefore, warranted consideration of extrinsic evidence as
a valid exception to the “eight-corner”
rule. The court ultimately determined,
however, that the affidavit proffered
by the insured only served to broaden
the scope of the underlying allegations,
and not to clarify a confused pleading.
Consequently, the “true but unpleaded
facts doctrine” could not apply.55
Finally, the court looked to the notice
provisions of the Pekin policy, which
required the insured to promptly notify
Pekin of any occurrence, the nature and
location of the injury, and other facts
pertinent to the suit. The court found that,
by failing to provide the facts contained
in the affidavit to Pekin as required by
the notice provision, the insured breach
the policy requirements and that, alone,
warranted striking the affidavit.56
Though a circuit court may “under certain circumstances, look beyond the underlying complaint in
order to determine an insurer’s duty to defend,” . . .
the Illinois Supreme Court has cautioned that
extrinsic evidence may not be considered if
“it tends to determine an issue crucial to the
determination of the underlying lawsuit.”
An Insurer May Introduce
Non-Liability Facts in a Declaratory
Judgment Action to Terminate Its
Duty to Defend
When allegations in a complaint
trigger the duty to defend, the insurer
cannot properly refuse to defend based
on extrinsic evidence. However, an
insurer may file a declaratory judgment
action and ask a court to find that
extrinsic evidence relieves it of a further
defense obligation. Though a circuit
court may “under certain circumstances,
look beyond the underlying complaint
in order to determine an insurer’s duty
to defend,” as noted above, the Illinois
Supreme Court has cautioned that extrinsic evidence may not be considered
if “it tends to determine an issue crucial
to the determination of the underlying
lawsuit.”57 In other words, a court may
only “consider evidence beyond the
underlying complaint if in doing so the
trial court does not determine an issue
critical to the underlying action.”58
The reason for which a court cannot
resolve issues in a declaratory judgment
action that overlap with questions of
liability in the underlying case derives
from the Illinois Supreme Court’s deci-
sion in Maryland Casualty Company v.
Peppers.59 In Peppers, the underlying
complaint alleged in one count that the
insured intentionally shot the injured
claimant and in another count that he
negligently shot the injured claimant.60
The insurer denied coverage and filed a
declaratory judgment action seeking a
finding that there was no coverage based
on an “intentional injury” exclusion.61
The trial court found the insured had
intentionally injured the injured claimant
and entered a judgment of no coverage.62
The Illinois Supreme Court reversed.
“By virtue of the interrelation” of the
various issues in the underlying and
declaratory judgment actions, the Peppers court held that such a finding by
the trial court in the insurance coverage
action was premature and an abuse of
discretion.63 The court reasoned that
the application of the intentional acts
exclusion raised “one of the ultimate
facts upon which recovery is predicated
in the [underlying] personal injury action
against Peppers,”—that is, whether the
acts complained of were intentional or
negligent—and, therefore, “[u]nder the
principle of collateral estoppel, the finding in the declaratory judgment action
could possibly establish the allegations
of the assault count in the complaint
and might preclude [the underlying
plaintiff’s] right to recover under the
other theories alleged.”64
Under the “Peppers doctrine,” as it
has come to be known, “it is generally
inappropriate for a court considering a
declaratory judgment action to decide
issues of ultimate fact that could bind the
parties to the underlying litigation.”65 An
“ultimate fact” is one that “‘would estop
the plaintiff in the underlying case from
pursuing one of his theories of recovery’
or one in which ‘an issue crucial to the
insured’s liability’ in the underlying
case is determined.’”66 The rationale
for the Peppers doctrine is based on the
recognition that “[i]n a declaratory judgment action, injured claimants are proper
and necessary parties and the judgment
in such an action is binding under the
doctrine of collateral estoppel as to the
facts determined by the judgment and
would preclude parties to the action from
relitigating them.” 67 Thus, where the
resolution of an issue in the declaratory
judgment action would require the court
to decide “ultimate facts upon which
recovery is predicated” in the underlying
case, the declaratory judgment action
should be dismissed as premature.68 Put
another way, “a declaratory judgment
should not be used to force the parties to
have a ‘dress rehearsal’ of an important
issue expected to be tried in the underlying action.”69
One of the leading Illinois cases to
discuss when an insurer can eliminate
its duty to defend in a declaratory
judgment action based on non-liability
facts is Fidelity & Casualty Co. of New
York v. Envirodyne Engineers, Inc.70 In
Envirodyne, a defending insurer brought
a declaratory judgment action in which it
asked the court to enter a ruling permitting it to withdraw from the defense
of its insured based on facts learned
by the insurer that were not part of the
underlying complaint. In Envirodyne, the
insurer’s policy included coverage for
Envirodyne if it was part of the physical
construction of the building at issue, but
excluded coverage if Envirodyne had
acted only as a consulting engineer. In
the underlying complaint, the plaintiff
generally alleged that Envirodyne and
its co-defendant were both involved in
construction. Envirodyne’s contract for
the project, however, and testimony by
an Envirodyne employee, made clear that
Envirodyne had acted only as a consultant and did not actually participate in
construction.
The court further noted that, “the only
time such evidence should not be
permitted is when it tends to determine
an issue crucial to the determination of
the underlying lawsuit.”72 Indeed, the
Envirodyne court considered extrinsic
evidence relating to the insured’s role
at the worksite only after confirming
that whether the insured performed
engineering services at the jobsite was
neither an issue of “ultimate fact” nor
an “issue crucial to [the insured’s]
liability in the underlying case.”73 The
Envirodyne court limited its holding to
cases where an insurer files a declaratory
action, and stated that an insurer who
fails to either defend its insured or file
a declaratory action is still estopped
from raising non-coverage as a defense
In Envirodyne, a defending insurer brought a
declaratory judgment action in which it asked the
court to enter a ruling permitting it to withdraw
from the defense of its insured based on facts
learned by the insurer that were not part
of the underlying complaint.
Ruling in favor of the insurer, the
Envirodyne court explained that while
the duty to defend flows from the allegations of the underlying complaint, if an
insurer opts to file a declaratory judgment action, that insurer “may properly
challenge the existence of such a duty
by offering evidence to prove that the
insured’s actions fell within the limitations of one of the policy’s exclusions.”71
and is bound to the allegations of the
underlying complaint only.74
Similarly, in Millers Mutual Insurance Association v. Ainsworth Seed
Co.75 an insurer was allowed to rely on
extrinsic evidence to defeat its duty to
defend when relying on a “completed
operations” exclusion. In Ainsworth,
Millers Mutual Insurance Association
(Millers) issued a general liability policy
to Ainsworth Seed Company (ASC)
that also covered ASC employees.
ASC and its employee were sued and
Millers argued that the completed
operations exclusion barred coverage. In
the subsequent declaratory proceeding,
both parties filed motions for summary
judgment and the trial court found in
favor of ASC.
On appeal, the appellate court
reversed, finding the Envirodyne decision
persuasive and carefully drafted. The
Millers court proceeded to examine the
allegations of the underlying complaint,
an affidavit submitted in support of a
motion for summary judgment, and the
terms of the policy. The affidavit revealed
that prior to the alleged injury, ASC
had merged with another firm and the
affidavit also established that all operations to be performed by or on behalf
of ASC has been completed. Therefore,
Corporation (IEC) sought coverage from
three insurers regarding their obligations
to defend IEC. All four of the parties
filed motions for summary judgment,
and one insurer, Hartford Insurance
Company (Hartford), argued the known
loss doctrine precluded coverage. The
trial court granted IEC’s motion for summary judgment, and Hartford moved for
reconsideration. The trial court reasoned
the known loss doctrine more closely
resembled a condition precedent than
a policy exclusion, and as such known
losses are rarely, if ever, evident from
complaints.78 Therefore, the best—and
frequently only—way for a court to
determine whether a condition has been
satisfied is to engage in a factual inquiry.
The court held that “an insurer will not
have abrogated its duty to defend simply
because it is unclear from the complaint
that it has a viable known loss defense.
Instead an insurer may offer extrinsic
The trial court reasoned the known loss doctrine
more closely resembled a condition precedent than
a policy exclusion, and as such known losses are
rarely, if ever, evident from complaints. Therefore,
the best—and frequently only—way for a court to
determine whether a condition has been satisfied
is to engage in a factual inquiry.
the appellate court held the completed
operations exclusion relieved Millers of
its defense obligation under the policy.76
Illinois federal courts have also
allowed insurers to rely on extrinsic
evidence to the defeat the duty to
defend.77 International Environmental
evidence on the issue for consideration
before ruling on whether a duty to defend
exists.”79
A 2005 federal decision also followed this line of reasoning when
addressing the duty to defend. In Grey
Direct, Inc. v. Erie Ins. Exch.,80 Erie
Insurance Company (Erie) issued an
insurance policy to Unicomm Direct,
Inc. (Unicomm Direct) with effective
dates of August 25, 2003 to August 25,
2004.81 Grey Direct, Inc. (Grey Direct)
contracted with Unicomm Direct for a
mailing campaign involving free travel
certificates, but on September 11, 2003,
Unicomm Direct inadvertently mailed
the wrong number of travel certificates,
resulting in Grey Direct having to honor
more travel certificates than expected.
Unicomm’s initial policy did not contain Printers Errors and Omissions
endorsement, but Unicomm obtained
the endorsement and made it retroactive
to August 23, 2003. Grey Direct sued
Unicomm Direct and obtained a default
judgment. Grey Direct, as assignee of
Unicomm Direct, filed a declaratory
action against Erie, arguing that Erie
breached its duty to defend. Erie filed a
motion for summary judgment and Grey
Direct filed a motion for judgment on the
pleadings, which the court in a footnote
stated it would convert and treat as a
motion for summary judgment because
the court needed to look beyond the
pleadings to determine the issues raised
in the motion. The court reasoned that
because the known loss doctrine goes to
whether the insurance policy has been
triggered, the court would look to Erie’s
extrinsic evidence on the issue of known
loss before determining whether a duty to
defend existed under the Printers Errors
and Omissions endorsement. The court
held that when looking at the evidence,
Erie did not have a duty to defend or
indemnify Unicomm Direct.
Furthermore, a recent federal decision allowed extrinsic evidence when
ruling on a motion to dismiss. In Sealtite
Roofing and Construction Co., Sealtite
Roofing & Construction Company
(Sealtite) performed roofing work and
was later sued by the owner.82 Its insurer,
Atlantic Casualty Insurance Company
(Atlantic), defended Sealtite under
a reservation of rights and also filed
a declaratory action. Atlantic argued
coverage was not afforded because of
a Roofing Limitation endorsement,
which excluded coverage in part for
“property damage” resulting from use
of a hot membrane roofing system.
Sealtite moved to dismiss the duty to
defend claim for failure to state a cause of
action. It was undisputed the underlying
complaint did not include any allegations that Sealtite installed a hot torch
applied membrane system. Nevertheless,
the court noted the insurer could use
extrinsic evidence if it did not determine
an issue crucial to the determination
of the underlying lawsuit.83 The court
also noted the policy via endorsement
expressly allowed Atlantic to make
a determination regarding a defense
obligation on evidence or information
extrinsic to any complaint or pleading.
The court determined there was no
impediment to resolving the question
of whether Sealtite installed a hot torch
membrane roof system, as the answer
to that question was not material to
whether Sealtite was liable in the
underlying lawsuit, and therefore Atlantic could present extrinsic evidence.
Based on the presence of a fact dispute
concerning the application of an exclusion, the court denied Sealtite’s motion
to dismiss.
Recently, the court in Illinois Tool
Works v. Travelers Casualty & Surety
Co. affirmed that an insurer cannot
rely on extrinsic evidence of liability
facts to defeat the duty to defend.84 The
The court held that “an insurer will not have
abrogated its duty to defend simply because it is
unclear from the complaint that it has a viable known
loss defense. Instead an insurer may offer extrinsic
evidence on the issue for consideration before
ruling on whether a duty to defend exists.”
coverage in that case dispute arose from
multiple suits brought by multiple plaintiffs against the insured, Illinois Tool
Works, involving injuries arising from
exposure to chemicals during welding
operations, ranging from the 1950s to the
early 2000s. Travelers issued insurance
policies to Illinois Tool Works for the
years 1971 to 1987. Evidence developed
in Illinois Tools Works’ defense demonstrated that Illinois Tool Works had
no involvement in welding until 1993,
when it purchased another company. In
the suits, Illinois Tool Works was sometimes named individually, sometimes
as successor-in-interest to the welding
companies it acquired, and sometimes
as both. Travelers claimed that it had no
duty to defend Illinois Tool Works in any
of the suits, even if the plaintiffs claimed
to have been injured during Traveler’s
coverage period, because the true facts
demonstrated that Illinois Tool Works
should have no liability for injuries that
occurred before 1993.
The court refused to allow Travelers
to rely upon the facts as to when Illinois
Tool Works joined the welding market
in any case where a plaintiff alleged
direct liability against Illinois Tool Works
with exposure dates during Travelers’
policy periods, or if the plaintiff failed
to state his or her injury or exposure
dates. The court held that, even if the
facts alleged in those cases proved to
be false or groundless, on their face,
the complaints stated claims against
Illinois Tool Works that were potentially
within Travelers’ coverage.85 Further,
the bare allegations of the underlying
complaints left open the possibility
that the plaintiff’s exposure or injury
occurred during the policy periods, and
the court reasoned that the insurer should
bear the burden of the plaintiff’s broad
drafting.86 Travelers was only permitted
to avoid defending Illinois Tool Works
in those cases where the plaintiff alleged
purely successor-in-interest claims based
on the acts of the after-acquired welding
companies because it found that Illinois
Tool Works did not bargain for a defense
from Travelers for claims made against
it by way of after-acquired companies
when it secured the insurance policies
at issue.87
Other Illinois cases similarly have
refused to permit an insurer to terminate
its duty to defend in a declaratory
judgment action with extrinsic evidence
relating to “ultimate facts” or “issues
crucial to the insured’s liability in the
underlying case.” For example, one court
refused to consider extrinsic evidence
that could relate to causation in a medical
malpractice case,88 and another refused
to consider an insured’s “Joint Venture
Agreement” in holding that a joint
venture policy exclusion did not defeat
the duty to defend because a finding that
the insured was part of a joint venture
could impact the insured’s liability in the
underlying negligence action.89
An Insurer That Believes Extrinsic
Evidence Terminates Its Duty to
Defend Must File a Declaratory
Judgment Before the
Underlying Suit is Resolved
The duty to defend arises when
the insurer first becomes aware of a
potentially covered complaint against
its insured.90 “An insurer that believes
an insured is not covered under a
policy cannot simply refuse to defend
the insured.”91 Instead, it must either:
(1) defend the suit under a reservation
of rights; or (2) seek a timely declaratory
judgment that there is no coverage.92
“If the insurer fails to take either of
these steps and is later found to have
wrongfully denied coverage, the insurer
is estopped from raising policy defenses
to coverage.”93
Although Illinois law permits an
insurer to seek a declaratory judgment
when it “is in doubt regarding its duty
to defend,”94 a declaratory judgment
regarding the duty to defend is not
available for claims that have been
dismissed or resolved. 95 The reason
why a declaratory judgment action is
untimely after the underlying claim
is resolved is that the purpose of the
declaratory judgment action is “settling
and fixing the rights of the parties.”96
A declaratory judgment is unnecessary
as to a resolved claim “because, at that
point, the refusal to pay either is or is
not a breach of contract and there is no
future action to guide.”97 Put differently,
an insurer that refuses to defend based
on extrinsic evidence that does not file
a declaratory judgment action will lose
the right to deny coverage for a settlement or judgment and also will lose the
right to rely on extrinsic evidence as an
excuse for its failure to defend.
As noted above, the duty to defend
in Envirodyne was determined at the
summary judgment stage of the proceedings, and the court relied upon the
timing to allow the extrinsic evidence
because this type of evidence would
generally be accorded to a party during
a summary judgment proceeding. While
estoppel was not an issue in Envirodyne
because Fidelity defended Envirodyne
pursuant to a reservation of rights, the
appellate court in a footnote cautioned
that a situation may arise when an insurer
defends its insured in the underlying
action but does not either defend under a
reservation of rights or file a declaratory
judgment proceeding, and if that insurer
later contested the issue of coverage, it
may be estopped from denying its own
liability under the policy. The National
Union court also, in a footnote, cautioned
that in refusing a tendered defense
without simultaneously seeking a declaratory judgment or defending under a
reservation of rights, an insurer runs the
risk that a court will find that a duty to
defend exists and by failing to honor the
duty, the insurer has sacrificed its right
to deny liability on the policy.
A Declaratory Judgment
Finding No Duty to Defend Has
No Retroactive Effect
When an insurer becomes aware of
a potentially covered complaint, it must
defend. The duty to defend arises as soon
as the insurer has notice that damages are
sought and, once triggered, continues “as
long as any questions remained concerning whether the underlying claims were
covered by the policies.”98 As discussed
above, an insurer’s knowledge of extrinsic nonliability facts that could defeat
the duty to defend is not a valid reason
to refuse to defend. Extrinsic evidence
does not terminate the duty to defend,
thereby permitting an insurer to stop
defending, until those facts are proven
in a declaratory judgment action. Until
the facts are proven, the duty to defend
continues.99
An Insured May Introduce Extrinsic
Evidence in a Declaratory Judgment
Action to Create a Duty to Defend
But It is Still Questionable Whether
This Includes An Insured’s Own
Third-Party Complaint
Illinois courts have permitted insureds to rely on allegations contained in
outside pleadings besides the underlying
the plaintiff ’s complaint and other
extrinsic evidence in order to create a
duty to defend. As noted above, in
Holabird,100 the court held that it could
consider the third-party complaint filed
by a co-defendant to determine whether
American Economy was required to
defend Holabird as an additional insured
under its policy. The court explained that
“consideration of a third-party complaint
in determining a duty to defend is in line
with the general rule that a trial court may
consider evidence beyond the underlying
complaint if in doing so the trial court
does not determine an issue critical to
the underlying action.”101 There, the court
ultimately held that the allegations contained in both the underlying complaint
and the third-party complaint, along with
the relevant language contained in the
American Economy policy, triggered
American Economy’s obligation to defend Holabird in the underlying lawsuit.
Additionally, as noted above, in Wilson102
the Illinois Supreme Court endorsed the
approach outlined in Holabird in holding
that it could consider the counterclaim
and affirmative defenses filed by the
insured from the underlying lawsuit, as
well as statements taken from him by
Pekin, in determining that a self-defense
exception in the Pekin policy applied to
an exclusion for intentional acts, thus
triggering Pekin’s duty to defend.
Insureds have successfully relied
upon Holabird and Wilson in other
decisions in order to utilize additional
information contained in documents
other than the underlying complaint
and insurance policy in determining the
insurer’s duty to defend. As noted above,
in Pulte Home Corp.,103 the court looked
at the plaintiff’s answers to requests to
admit, the named insured’s answers to
Pulte’s counterclaim against it, and the
contract between Pulte and the named
insured subcontractor in finding that
Pekin had a duty to defend Pulte in
connection with the underlying lawsuit.
Additionally, in Pekin Insurance Co. v.
Equilon Enterprises LLC,104 the court
looked to franchise agreements attached
to Equilon Enterprises, d/b/a Shell Oil
Products US, and Shell Oil Company’s
(collectively Shell) response to Pekin’s
summary judgment motion in determining that Pekin had a duty to defend
Shell in connection with the underlying
lawsuit.105
One exception carved out by the
courts with respect to this issue is where
the outside evidence that the insured is
attempting to rely upon in order to trigger
a duty to defend is its own third-party
complaint. In American Economy Insurance Co. v. DePaul University,106 the
companion case to Holabird, the court
rejected consideration of the third-party
complaint because it was prepared and
filed by the property owner, the party
seeking coverage in that case. The court
declined to allow a putative additional
insured to bolster its claim of coverage by referencing its own third-party
complaint.107 National Fire Insurance
of Hartford v. Walsh Construction Company,108 similarly relied upon DePaul
to hold that Walsh could not rely upon
the allegations contained in Walsh’s
third-party complaint to support its claim
of coverage under the National Fire
policy. The National Fire court further
noted that Walsh’s third-party complaint
faced an “additional strike” against
its consideration as it was filed after
National Fire brought the declaratory
judgment action therefore suggesting
that the “third-party complaint sought
to add what the underlying construction
negligence complaint did not state[.]”109
Since Wilson, it is questionable
whether this distinction some courts have
drawn between pleadings filed by the
party seeking coverage is still significant.
In Scottsdale Insurance Co. v. Walsh
Construction Co.,110 the U.S. District
Court for the Northern District of Illinois
refused to look to Walsh’s third-party
complaint and other testimonial evidence
in order to determine the duty to defend
stating that Wilson restricted the ability
of the court to review such additional
documents outside the four corners of the
underlying lawsuit to situations where
there are “unusual and compelling circumstances” necessitating the court to do
so.111 However, this precise argument was
rejected by the court in Illinois Emcasco
Insurance Co. v. Waukegan Steel Sales,
Inc.,112 where it stated as follows:
Emcasco seeks to restrict the
ability of the court to review
such additional documents by
focusing on the phrase “unusual
and compelling” as used in
Zurich Insurance Company v.
Raymark Industries, Inc.[citation omitted], but rejected in
National Union Fire Insurance
Co. of Pittsburgh v. R. Olson
Construction Contractors, Inc.,
[citation omitted]. However, our
supreme court in Wilson, [citation omitted], followed Illinois
cases which did not require
such circumstances and did not
limit a court’s review only to the
underlying complaint. [citations
omitted.] Furthermore, the First
District has not followed Zurich
in restricting review of thirdparty complaints to situations
where there are unusual and
compelling circumstances. In
neither Pulte, [citation omitted],
nor Roszak, [citation omitted],
did the court’s decision rest
upon whether the situation was
so unusual and compelling as to
require the court to look at additional material. Thus, Zurich,
if applied in a situation such
as this, would run contrary to
our supreme court’s decision in
Wilson as well as our decisions
in Pulte and Roszak.113
Moreover, post-Illinois Emcasco,
another division of the First District
noted in an unpublished Rule 23 order
that the authority discussed in Wilson placed limitations on whether the
trial court must necessarily consider a
third-party complaint prepared by the
additional insured seeking coverage, thus
implicitly recognizing that the distinction
with respect to pleadings filed by the
party seeking coverage has survived
Wilson.114
Illinois courts have attempted to balance
the insured’s expectation of a defense
with the insurer’s right to investigate
the true facts behind the complaint’s
allegations. While the current standard is
correctly balanced in favor of the insured,
it promotes fairness by allowing insurers
who have defended under reservation
of rights or filed declaratory judgment
actions to rely upon extrinsic evidence
to attempt to avoid the duty to defend, at
least where consideration of the extrinsic
evidence does not determine an issue
crucial to the underlying lawsuit.
An Insured That Believes Extrinsic
Evidence Creates the Duty to
Defend is Not Obligated To Bring a
Declaratory Judgment Action
Although an insurer may not refuse
to defend based on its knowledge of
extrinsic facts until such facts are proven
in a declaratory judgment action, there is
no requirement that an insured procure a
declaratory judgment to trigger the duty
to defend with extrinsic evidence. To
require otherwise would be inconsistent
with the potential-for-coverage duty to
defend standard.
Conclusion
(Endnotes)
Valley Forge Ins. Co v. Swiderski Elecs.,
Inc., 223 Ill. 2d 352, 363 (2006).
1
Employers Ins. of Wausau v. Ehlco
Liquidating Trust, 186 Ill. 2d 127, 153 (1999)
(emphasis in original).
2
General Agents Ins. Co. of America, Inc.
v. Midwest Sporting Goods Co., 215 Ill. 2d
146, 165 (2005).
3
4
Id. at 165-166
Associated Indem. Co. v. Insurance Co.
of North America, 68 Ill. App. 3d 807, 816
(1st Dist. 1979).
5
Fidelity & Casualty Co. of New York v.
Envirodyne Eng’r., Inc., 122 Ill. App. 3d 301,
308 (1st Dist. 1983).
6
Illinois Tool Works, Inc. v. Travelers Cas.
& Sur. Co., 2015 IL App (1st) 132350, ¶ 46.
7
Farmers Elevator Mut. Ins. Co. v.
Burch, 38 Ill. App. 2d 249, 253 ( Dist. 1962);
Maryland Cas. Co. v. Peppers, 64 Ill. 2d
187, 193 (1976); Zurich Ins. Co. v. Raymark
Indus., Inc., 118 Ill. 2d 23, 52 (1987); Crum
& Forester Managers Corp. v. Resolution
Trust Corp., 156 Ill. 2d 384 (1993). American
States Ins. Co. v. Koloms, 177 Ill. 2d 473, 479
(1997); Pekin Ins. Co. v. Wilson, 237 Ill. 2d
446, 455 (2010).
8
Chandler v. Doherty, 299 Ill. App. 3d
797, 802 (4th Dist. 1998)
9
Sims v. Illinois National Cas. Co., 43 Ill.
App. 2d 184, 193 (3d Dist. 1963).
10
Clemmons v. Travelers Ins. Co., 88 Ill.
2d 469, 471 (1981).
11
In summary, while the duty to defend
standard is well-established in Illinois, it
has evolved over time from a strict “eight
corners” test to a more liberal standard
that allows litigants to offer evidence
outside of the complaint’s allegations
to trigger or avoid the duty to defend.
Clemmons, 88 Ill. 2d at 471.
12
Id. at 476.
13
Id.
14
Id.
15
16
Id.
National Union Fire Ins. Co. of
Pittsburgh, Penn. v. Glenview Park Dist.,
158 Ill. 2d 116, 124 (1994).
17
18
Glenview Park Dist., 158 Ill. 2d at 123.
19
68 Ill. App. 3d 807 (1st Dist. 1979).
Id. at 813. The relationship between
Blond and Robinson with respect to
ownership and use of the vehicle at issue
was more complex than describe here, but
those additional facts are not relevant to the
coverage question discussed here.
20
21
22
23
24
25
26
Id. at 818.
Id.
Id. at 816.
Id.
Id. at 816-817.
87 Ill. App. 3d 446, 452 (1st Dist. 1980).
238 Ill. App. 3d 335, 337-38 (1st Dist.
1992).
64
404 Ill. App. 3d 336 (1st Dist. 2010).
Allstate Insurance Co. v. Kovar, 363 Ill.
App. 3d 493, 501 (2d Dist. 2006).
39
Id. at 342.
40
Id. at 337.
29
382 Ill. App. 3d 1017 (1st Dist. 2008).
30
Id. at 1031.
31
Id. at 1032.
National Union Fire Ins. Co. v. R. Olson
Const. Contractors, Inc., 329 Ill. App. 3d 228
(2d Dist. 2002).
32
National Union Fire Ins. Co., 329 Ill.
App. 3d at 1034.
33
34
35
36
37
Id. at 1034-35.
Id. at 1035.
237 Ill. 2d 446 (2010).
Id. at 465.
65
Clarendon American Ins. Co. v. B.G.K.
Sec. Servs., 387 Ill. App. 3d 697, 704 (1st
Dist. 2008) (quoting Fidelity & Casualty Co.
v. Envirodyne Engineers, Inc., 122 Ill. App.
3d 301, 306-07 (1st Dist. 1983)).
66
Id. at 342-44.
41
323 Ill. App. 3d 243 (2d Dist. 2001).
42
Id. at 251.
43
Id.
44
Thornton v. Paul, 74 Ill. 2d 132, 156
(1978).
67
Id.
45
2012 IL App (2d) 110195.
46
Id. ¶ 36.
47
Id. ¶ 37.
48
Id. ¶ 41.
49
Id. ¶ 43.
50
Peppers, 64 Ill. 2d at 197; accord TIG
Ins. Co. v. Canel, 389 Ill. App. 3d 366, 374
(1st Dist. 2009) (dismissing coverage action
as premature under Peppers doctrine);
Scottsdale Ins. Co. v. City of Waukegan, No.
13-cv-03088, 2014 U.S. Dist. LEXIS 98432,
at *8 (N.D. Ill. July 21, 2014) (same).
68
American Alt. Ins. Co. v. Lisle-Woodridge
Fire Protection Dist., 2014 IL App (2d)
130803-U, ¶ 21.
69
Id.
51
Id. ¶ 44.
52
Id. ¶ 45.
70
Id.
71
Id. ¶ 50.
72
Id. ¶ 55.
73
53
27
28
Id.
Id. at 465-66.
38
122 Ill. App. 3d 301 (1st Dist. 1983).
54
Id. at 304.
55
Id. at 304-05.
56
Id. at 308.
Pekin Ins. Co, 237 Ill. 2d at 459 (quoting
Fidelity & Casualty Co. v. Envirodyne
Engineers, Inc., 122 Ill. App. 3d 301, 304
(1st Dist. 1983)).
57
Pekin Ins. Co. v. Wilson, 237 Ill. 2d at
459 (quoting Am. Econ. Ins. Co. v. Holabird
& Root, 382 Ill. App. 3d at 1031).
58
64 Ill. 2d 187 (1976).
59
Id. at 193.
60
Id. at 192.
61
See Id.
62
Id. at 196-97.
63
Id. at 305-06.
74
194 Ill. App. 3d 888 (4th Dist. 1989).
75
Id. at 893.
76
International Envtl. Corp. v. National
Union Fire Ins. Co., 860 F. Supp. 511 (N.D.
Ill. 1994); Grey Direct, Inc. v. Erie Ins. Exch.,
2005 U.S. Dist. LEXIS 26759 (N.D. Ill. Nov.
7, 2005); Atlantic Casualty Ins. Co. v. Sealtite
Roofing & Constr. Co., 2014 U.S. Dist.
LEXIS 160293 (N.D. Ill. Nov. 14, 2014).
77
International Envtl. Corp., 860 F. Supp.
at 517.
78
Id.
79
Grey Direct, Inc., 2005 U.S. Dist. LEXIS
26759.
80
81
Id. at *4.
Sealtite Roofing & Constr. Co., 2014 U.S.
Dist. LEXIS 160293.
82
83
Id.
84
2015 IL App (1st) 132350.
85
Id. ¶¶ 20, 27.
86
Id. ¶ 27.
87
Id. ¶ 39.
Royal Ins. Co. of America v. Insignia Fin.
Grp., Inc., 323 Ill. App. 3d 58, 67 (1st Dist.
2001).
88
Clarendon American Ins. Co. v. B.G.K.
Sec. Svcs., Inc., 387 Ill. App. 3d 697, 704 (1st
Dist. 2008)
89
See Cincinnati Cos. v. West American Ins.
Co., 183 Ill. 2d 317, 324 (1998)
90
A-1 Roofing Co. v. Navigators Ins.
Co., 2011 IL App (1st) 100878, ¶ 20 (citing
Employers Ins. of Wausau v. Ehlco Liquidating
Trust, 186 Ill. 2d 127, 150 (1999)).
91
92
Ehlco, 186 Ill. 2d at 150.
93
Id. at 150-151.
Fidelity & Casualty Co. of New York v.
Envirodyne Eng’r. Inc., 122 Ill. App. 3d 301,
304 (1st Dist. 1983) .
94
See Employers Ins. of Wausau v. Ehlco
Liquidating Trust, 186 Ill. 2d 127, 157 (1999)
(a declaratory judgment action that is filed
after the underlying action has been resolved
is “untimely as a matter of law”).
95
Id. at 305.
96
Adkins Energy, LLC v. Delta-T Corp.,
347 Ill. App. 3d 373, 378 (1st Dist. 2004).
97
General Agents Ins. Co. of America, Inc.
v. Midwest Sporting Goods Co., 215 Ill. 2d
146, 165 (2005).
98
Id.
99
382 Ill. App. 3d 1017 (1st Dist. 2008).
100
work order for the project, and the certificate
of insurance satisfied the requirement of a
written contract in the additional insured
endorsement.
106
However, the court went on to find
that American Economy owed a duty to
defend DePaul under the additional insured
endorsement because the record showed
that “true but unpleaded facts” should have
alerted it to the possibility that the underlying
complaint was potentially within coverage of
the policy. Id. at 181.
107
108
392 Ill. App. 3d 312 (1st Dist. 2009).
109
Id. at 322.
2011 U.S. Dist. LEXIS 111413 (N.D. Ill.
Sept. 29, 2011).
110
Id. at 1031.
111
237 Ill. 2d 446 (2010).
112
404 Ill. App. 3d 336 (1st Dist. 2010).
113
2012 IL App (1st) 111529.
114
101
102
103
104
Mt. Hawley Ins. Co. v. Robinette, 2013 IL
App (1st) 112874, also involved the court’s
consideration of extrinsic evidence in order
to determine the duty to defend. There the
court held that the subcontract agreement,
105
383 Ill. App. 3d 172 (1st Dist. 2008).
Id. at ¶ 18.
2013 IL App (1st) 120735, at ¶ 17.
Id.
2014 IL App (1st) 132351-U.
concluded that Nautilus had no duty to
defend or indemnify the Developer.
On appeal, the court analyzed
whether the property damage at issue
gave rise to a duty to defend. Id. at 731.
In determining whether an insurer has
a duty to defend its insured, “a court
must compare the facts alleged in the
underlying complaint to the relevant
provisions of the insurance policy.” Id.
at 731 (quoting Valley Forge Ins. Co. v.
Swiderski Elecs. Inc., 223 Ill. 2d 353, 363
(2006)). Nautilus correctly argued that
the original and first amended complaints
did not assert facts that would bring the
case even potentially within coverage
of the policies because they both only
alleged damage to the building itself,
which does not constitute an “occurrence” under Illinois law. Nautilus Ins.
Co., 764 F.3d at 731.
By their terms, the policies applied
to “property damage” only if it was
caused by an “occurrence,” defined as
“an accident, including continuous or
repeated exposure to substantially the
same general harmful conditions.” Id.
While accident is not defined in the
policies, Illinois courts have defined it
as “an unforeseen occurrence, usually
of an untoward or disastrous character or
an undersigned, sudden, or unexpected
event of an inflictive or unfortunate
character.” Id. (citing Westfield Nat’l
Ins. Co. v. Cont’l Cmty. Bank & Trust
Co., 346 Ill. App. 3d 113, 117 (2d Dist.
2006). In the development and construction context, several Illinois cases
have held that “damages which are the
natural and ordinary consequences of
faulty workmanship do not constitute an
‘occurrence’ or ‘accident.’” Stoneridge
Dev. Co. v. Essex Ins. Co., 382 Ill. App.
3d 731, 751 (2d Dist. 2003) (collecting
cases). To hold otherwise, “would
transform the policy into something akin
to a performance bond.” Stoneridge Dev.
Co., 382 Ill. App. 3d at 752.
The Board did not seriously dispute
that the allegations in the first two
complaints alleged only damage to the
building itself without more, which
clearly is not an “occurrence” under
Illinois law. Nautilus Ins. Co., 764 F.3d
at 732. The Seventh Circuit rejected the
Board’s attempt to circumvent this clear
principle by referring to the “underlying
complaints” collectively, when it was not
until the second amended complaint that
personal property damage was alleged,
and held that the district court did not
err in finding the first two complaints
did not give rise to a duty to defend by
Nautilus. Id.
Estoppel Theory Did Not Bar Policy
Defenses When the Pleadings Did
Not Give Rise to a Duty to Defend
Before considering whether the
second amended complaint gave rise to
Nautilus’ duty to indemnify, the court
considered the Board’s argument that
Nautilus was estopped from raising any
policy defenses because it unreasonably
delayed in filing its declaratory judgment
action. Generally, when a complaint
alleges facts within or potentially within
the coverage of the policy, if the insurer
fails to defend under a reservation of
rights or seek a declaratory judgment
within a reasonable time, it will be estopped from later raising policy defenses
to coverage. Standard Mut. Ins. Co. v.
Lay, 2013 IL 114617, ¶ 19.
According to the Board, 23 months
had elapsed between the Board’s initial
tender of the complaint and the filing of
the declaratory action, which ordinarily
would be considered an unreasonable
delay. Nautilus Ins. Co., 764 F.3d at 733.
However, the court concluded that the
timeframe urged by the Board was not
the proper one because if the insurer had
no duty to defend, the application of the
estoppel doctrine is inappropriate. Id.
Because the first two complaints failed to
allege a covered “occurrence” and it was
not until the second amended complaint
alleged damage to personal property,
Nautilus had no colorable duty to defend
the first two complaints. Based on the
date of the filing of the second amended
complaint, Nautilus acted within 5
months, which was not an unreasonable
delay. Id. The court therefore declined to
estop Nautilus from asserting its policy
defenses.
“Completed Work” Exception Bars
Coverage Even When Work Continued on Other Areas of Property
The court then analyzed whether
Nautilus was relieved from a duty
to defend or indemnify based on the
products-completed operations hazard
exclusion. The exclusion removed any
property damage that occurs “away
from premises [the Developer] own[s]
or rent[s] and arising out of” the Developer’s product or work. Id. The policies
continue to cover work that has not been
completed or abandoned.
Thus, the Board argued that the
water damage occurred before work on
the building was completed, while Nautilus argued that once residents moved
into the building, it was completed per
the terms of the policy. Id. Examining
the “Your Work” definitions quoted
above, the court found that the language
implied that the insured’s work could
be completed in different phases, with
some work falling outside of the scope
of coverage as they are completed. Id.
at 734. In effect, the policies no longer
Property Insurance | continued
covered each part of the work once it
had been put to its intended use by a
non-contractor. Id.
The second amended complaint
alleged that the damage occurred to
personal property once the individual
unit owners had moved into the units
along with their personal property, demonstrating that the owners were putting
the units to their intended use. Id. Thus,
those units were taken outside the scope
of coverage per the policy language. The
court flatly rejected the Board’s argument
that the units could not have been put to
their intended use because the residents
lacked access to uncompleted common
areas given the absence of any evidence
that the unit owners’ inability to access
certain common areas interfered with
the intended use of the individual units
themselves. Id.
Practical Takeaways
This case highlights that a “completed-operations” exclusion may apply
to one portion of a property once it is
put to its intended purpose, even though
the insured is continuing operations on
a different part of the property, a not
uncommon situation in condominium
or townhome developments. The case
also establishes that a declaratory action should be considered timely if it is
filed within 5 months of the insurer’s
notice of a potentially covered claim.
Lastly, for plaintiff and defense counsel
alike, it demonstrates the importance of
comparing allegations in a pleading (and
amended pleadings) with the language of
the insurance policy at issue. As pleadings evolve in subsequently amended
complaints, so too might an insurer’s
duty to defend or file a declaratory action
to obtain a determination otherwise.
Recent Decisions
Stacy E. Crabtree
City Council Committee Members’
Settlement in Front of Judge
Unenforceable but Sanctionable
The plaintiff filed suit against the
City of Rockford after falling in a
sinkhole and suffering an injury in 2009.
Meade v. City of Rockford, 2015 IL App
(2d) 140645, ¶ 3. During the second
day of a two-day pretrial settlement
conference and on the last business day
before trial, the City offered to settle for
$600,000, to which the plaintiff agreed.
Meade, 2015 IL App (2d) 140645,
¶¶ 4-5. Notably, Winnebago County
Circuit Court’s local rules required parties with settlement authority to attend
pretrial settlement conferences. Id. ¶ 4.
All five members of the Rockford City
Council’s Code and Regulation Committee were present by phone on behalf of
the City at the time and approved of the
settlement. Id. ¶ 5.
The plaintiff subsequently signed
a settlement agreement drafted by the
City’s attorney and returned it to the
City. Id. ¶ 6. Two weeks later, the City
Council rejected the settlement by a
vote of seven to five. Id. ¶ 7. Two of the
Committee members who had attended
the settlement conference changed their
position and voted to reject the settlement
and another Committee member did
not attend or vote. Id. Thereafter, the
plaintiff filed a motion to enforce the
settlement. Id. ¶ 9. The trial court denied
the motion and certified questions to the
Illinois Appellate Court Second District
concerning the enforceability of the
settlement. Id. ¶¶ 9-10.
The first certified question focused
on whether the Illinois Municipal Code,
65 ILCS 5/3.1-40-40, required all City
Council members to approve the settlement in light of the recent decision in
Wheeling Park District v. Arnold, 2014
IL App (1st) 123185. Meade, 2015 IL
App (2d) 140645, ¶ 11. The Illinois
Municipal Code provides:
Vote required. The passage of
all ordinances for whatever
purpose, and of any resolution
or motion (i) to create any
liability against a city or (ii) for
the expenditure or appropriation
of its money shall require the
concurrence of a majority of all
members then holding office
on the city council, . . . unless
About the Author
Stacy E. Crabtree is an associate in the Peoria office
of Heyl, Royster, Voelker &
Allen, P.C. She represents
businesses, not-for-profits,
and governmental entities
in commercial and tort litigation in state and federal
court. She also assists clients with commercial
transactions, corporate governance, and compliance issues. Ms. Crabtree received her J.D.,
summa cum laude, from Florida Coastal School
of Law and B.A., summa cum laude, from Bradley University.
otherwise expressly provided
by this Code or any other Act
governing the passage of any ordinance, resolution, or motion.
65 ILCS 5/3.1-40-40. The plaintiff
argued based on the Arnold case that the
Committee was not creating a liability
for the City when offering the settle
the case and as a result approval of the
majority of the City Council members
was not required. Meade, 2015 IL App
(2d) 140645, ¶ 17.
In Arnold, a park district employee
was offered a severance agreement by the
park district’s executive director. Arnold,
2014 IL App (1st) 123185, ¶ 3. Under the
severance agreement, the plaintiff was
to resign and receive severance pay and
insurance contributions in exchange for
a full release of any claims the plaintiff
had against her employer. Id. ¶ 3. The
plaintiff signed the agreement and had
received the last of the severance payments when she filed a discrimination
charge against the park district. Id.
¶¶ 5-6. The park district filed a declaratory
judgment action to enforce the settlement
agreement. Id. ¶ 7. In the declaratory
judgment action, the relevant statute,
the Illinois Park District Code, provided:
No member of the board of any
park district, nor any person,
whether in the employ of said
board or otherwise, shall have
power to create any debt, obligation, claim or liability, for or
on account of said park district,
or the monies or property of
same, except with the express
authority of said board conferred at a meeting thereof and
duly recorded in a record of its
proceedings.
Judicial admissions are statements of fact that are
deliberate, clear and unequivocal; the court found the
Committee members merely stated they approved of
the offer during the settlement conference but not that
no further approvals would be necessary or that they
would not change their votes. Even if the Committee
members’ approvals were judicial admissions,
the court was hesitant to prohibit the Committee
members from changing their votes.
70 ILCS 1205/4-6. The trial court found
the settlement agreement enforceable,
and the employee appealed. Arnold, 2014
IL App (1st) 123185, ¶ 9.
The Illinois Appellate Court First
District affirmed, holding the Park
District Code did not apply because the
settlement agreement did not create a
new debt or liability. Id. ¶ 15. Instead, the
settlement agreement was a “compromise
of an existing disputed claim.” Id. In
further support of its ruling, the first
district noted the employer had already
paid the employee under the settlement
agreement, and therefore the employer
ratified the agreement by performing its
obligations. Id. ¶ 21.
The second district in Meade distinguished Arnold from the case before it
in two ways. Meade, 2015 IL App (2d)
140645, ¶¶ 22-23. First, the City Council
never performed under the settlement
agreement to ratify it. Id. ¶ 22. Second,
the appellate court found the Illinois
Municipal Code differed from the Park
District Code in that the Municipal Code
required council approval not only as
to the creation of a liability but also as
to the expenditure or appropriation of
money. Id. ¶ 23. Consequently, even
if the settlement agreement did not
constitute the creation of liability, it was
nonetheless an expenditure of $600,000
that required City Council approval. Id.
The second question certified to
the appellate court focused primarily
on whether the Committee approval of
the offer before the judge at the pretrial
settlement conference created a binding
obligation of the City, or if the Committee members were obligated to vote at
the Council meeting consistent with their
approval at the settlement conference.
Id. ¶¶ 24, 30. Specifically, the plaintiff
argued a Rockford ordinance permitted
less than full Council approval of
settlements and as the more specific law
should take precedence over the Illinois
Municipal Code. Id. ¶ 27. The second
district rejected this argument, holding
that “a municipality may not adopt an
ordinance that conflicts with state law.”
Id. ¶ 28.
The second district also rejected the
plaintiff’s argument that the Committee
members’ approvals of the settlement offer were binding judicial admissions, and
Recent Decisions | continued
the Committee members were prohibited
from later changing their votes. Id. ¶ 34.
Judicial admissions are statements of fact
that are deliberate, clear and unequivocal;
the court found the Committee members
merely stated they approved of the offer
during the settlement conference but
not that no further approvals would be
necessary or that they would not change
their votes. Id. Even if the Committee
members’ approvals were judicial admissions, the court was hesitant to prohibit
the Committee members from changing
their votes. Id. ¶ 35. Citing to the Illinois
Supreme Court decision in Hoerrmann
v. Wabash Ry. Co., 309 Ill. 524 (1923),
the appellate court pointed out that courts
should not “attempt to enjoin the decisions of municipal governing bodies”
absent fraud or corruption. Meade, 2015
IL App (2d) 140645, ¶ 35.
The third certified question inquired
as to whether a settlement reached by the
parties before the court, memorialized
in a settlement agreement drafted by
the City, and signed by the plaintiff was
enforceable absent the City Council’s
vote to approve it. Id. ¶ 39. The plaintiff
argued that all the requirements of a
valid contract were present: an offer, an
acceptance and consideration. Id. ¶ 41.
Furthermore, the settlement agreement
did not state it was contingent on the
approval of the full City Council per the
Illinois Municipal Code. Id. ¶ 40. The
second district rejected this argument,
holding that “those who enter into
agreements with municipalities are
charged with knowledge of the statutory
requirements that govern such agreements.” Id. ¶ 43. In summary, the second
district answered all certified questions
in the negative and in support of the trial
court’s refusal to enforce the settlement
agreement. Id. ¶ 45.
Despite finding in favor of the City,
the second district noted that “both the
plaintiff and the court relied upon the
City’s implied representation that its
attorney had authority to settle” and the
trial court was clearly frustrated by the
waste of everyone’s time during the twoday pretrial settlement conference. Id.
¶ 37. As a result, the second district stated
the City’s actions may well be sanctionable under Illinois Supreme Court Rule
219 for acting with “willful disregard for
the orders and deadlines set by the trial
court” or conduct that “unnecessarily and
vexatiously multiplies the cost of litigation borne by the other party.” Id. ¶ 38.
The second district deferred to the trial
court, however, in deciding whether to
actually sanction the City given the trial
court observed the City and its attorneys’
conduct. Id.
In considering the court’s decision in Meade, attorneys representing
municipal bodies should ensure when
engaging in settlement discussions that
the opposing party and court, if present,
are aware of the actual authority of the
attorney and any further approvals that
may be required before settlement can
be finalized. Attorneys representing the
party opposing municipal bodies should
take caution and instruct their clients
on the full board approval that may be
required of the municipal bodies and
approach settlement negotiations with
municipal bodies with the same in mind.
Failure to do so could result in sanctions
for the municipal body, and a misguided
strategy and unhappy client for the opposing party.
A Motion for Leave
to Amend a
Complaint Does
Not “Commence”
an Action for the
Purpose of the
Statute of
Limitations
In Bentley v. Hefti, 2015 IL App
(4th) 140167, the Illinois Appellate Court
Fourth District held that a motion for
leave to amend a complaint to add a new
cause of action filed prior to the expiration of the statute of limitations, but not
granted by the circuit court until after the
expiration, was not timely filed under the
applicable statute of limitations.
In Bentley, the plaintiff filed a
three-count complaint against the defendants seeking money damages for
uncompensated construction services
that the plaintiff allegedly performed
for the defendants in 2010. On August
28, 2013, the plaintiff filed a motion
for leave to add counts IV and V, and
attached to that filing a document further
entitled, “Supplement to the Complaint
to Add Count[s] IV and V,” which
alleged that almost a year earlier, on
August 29, 2012, one of the defendants
published defamatory statements against
the plaintiff. Bentley, 2015 IL App (4th)
140167, ¶ 1.
The motion was scheduled for
hearing on September 26, 2013, at
which time the circuit court granted
the plaintiff leave to file the purported
supplemental complaint instanter. The
named defendant then filed a motion to
dismiss, arguing that the supplemental
pleading was time barred by the one-year
statute of limitations for defamation,
which had expired on August 29, 2013.
The circuit court denied the motion
to dismiss but entered an order pursuant
to Illinois Supreme Court Rule 308(a)
certifying the following question for
interlocutory appeal:
If a motion for leave to file a
supplemental complaint pursuant to [section 2-609 of the Code
of Civil procedure (735 ILCS
5/2-609 (West 2012))] is filed
with the proposed supplemental
complaint attached before the
expiration of the statute of
limitations, but leave of court
is not obtained to file such
supplemental complaint until
after the statute of limitations
has expired, is the new cause of
action stated in the supplemental complaint time barred?
Id. ¶ 2. Upon review, the appellate court
observed that the governing statute of
limitations stated that actions for defamation “shall be commenced within one
year next after the cause of action accrued.” Id. ¶ 15. In order to answer the
certified question, the appellate court
noted it had to first determine whether
the filing of a motion for leave to file
a supplemental complaint constituted
“the commencement of the action set
forth in the attached supplemental complaint.” Id. (emphasis in the original).
According to the appellate court, “it
does not.” Id.
The appellate court stated that
section 2-609 of the Code provides that
“[s]upplemental pleadings, setting up
matters which arise after the original
pleadings are filed, may be filed within
a reasonable time by either party by
The court reasoned that, because an action must be
“commenced” within the limitations period, and an action
is “commenced by the filing of a complaint”, “the plaintiff’s
motion for leave to file a supplemental complaint—which by
its very nature admitted that the supplemental complaint
was not yet filed—did not toll the statute of limitations.”
leave of court and upon terms.” Id. ¶ 16
(emphasis in the original); see 735 ILCS
5/2-609. The court observed, “[b]y its
plain terms, section 2-609 of the Code
requires a party to obtain leave of court
to file a supplemental pleading. In other
words, unless and until leave of court is
granted, a supplemental pleading is not
considered filed.” Id. According to the
appellate court, “[w]e can think of no
other reasonable interpretation of section
2-609 of the Code, and our research has
uncovered no case law setting forth a
different interpretation.” Id.
The appellate court also looked
to section 2-201 of the Code of
Civil Procedure, which provides that
“[e]very action, unless otherwise expressly provided by statute, shall be commenced by the filing of a complaint.” Id.
¶ 17; see also 735 ILCS 5/2-201(a). The
court reasoned that, because an action
must be “commenced” within the limitations period (735 ILCS 5/13-201), and
an action is “commenced by the filing
of a complaint” (735 ILCS 5/2-201(a)),
“the plaintiff’s motion for leave to file a
supplemental complaint—which by its
very nature admitted that the supplemental complaint was not yet filed—did not
toll the statute of limitations.” Bentley,
2015 IL App (4th) 140167, ¶ 17. Consequently, the appellate court answered
the certified question in the affirmative,
and then remanded the case for further
proceedings. Id. ¶ 21.
As a parting note, the appellate
court offered some guidance for future
scenarios, stating that the plaintiff
could have easily preserved his claim
by filing a separate complaint as a new
case alleging the additional counts on
or before August 28, 2013. Instead, the
court noted, “plaintiff all but guaranteed
that his defamation complaint would
not be filed within the limitations period
when he opted to proceed under section
2-609 of the Code—a relatively arcane
pleading statute that carries the additional
burden and delay of obtaining leave of
the court.” Id. ¶ 19.
Supreme Court Grants Review of
Bowman v. Ottney
In the last issue, this column discussed Bowman v. Ottney, 2015 IL
App (5th) 140215, where the Illinois
Appellate Court Fifth District held that
a motion for substitution of judges is
properly denied if the plaintiff “tested the
waters” through substantive rulings with
the court in a previously dismissed case.
Since that time, the Illinois Supreme
Court granted the plaintiff’s petition for
leave to appeal. Look for the summary of
any Supreme Court decision on the case
in an upcoming issue.
Appellate Practice Corner
Scott L. Howie
The Mootness Doctrine
and the Public-Interest Exception
When is an appeal no longer a
dispute? When it has become moot—that
is, when “the issues presented in the trial
court no longer exist because events
subsequent to the filing of the appeal
render it impossible for the reviewing
court to grant the complaining party
effectual relief.” Bettis v. Marsaglia,
2014 IL 117050, ¶ 8 (citing Jackson v.
Board of Election Commissioners, 2012
IL 111928, ¶ 28). The mootness doctrine
ordinarily requires the court to dismiss
such an appeal as moot, as reviewing
courts are reluctant to review cases
“merely to establish a precedent or guide
future litigation.” See In re Marriage of
Donald B., 2014 IL 115463, ¶ 23 (quoting Madison Park Bank v. Zagel, 91 Ill.
2d 231, 235 (1982)). An exception to
the mootness doctrine, however, allows
a court to resolve an otherwise moot
issue that involves “a substantial public
interest.” Bettis, 2014 IL 117050, ¶ 9
(citing Wisnasky-Bettorf v. Pierce, 2012
IL 111253, ¶ 12).
In some cases, there is room for
argument as to whether an appeal is
moot—and even if it is, whether the legal
dispute at issue in the appeal concerns a
substantial public interest and should be
decided on the merits. This edition of
the Appellate Practice Corner addresses
three recent cases in which the supreme
court discussed what does or does not
prevent a reviewing court from granting
effectual relief, and what makes an appeal
important enough that a court should issue what amounts to an advisory opinion
despite being unable to grant such relief.
Moot Appeal, no Public-Interest
Exception, in Eckersall v. Eckersall
In Eckersall v. Eckersall, 2015 IL
117922, the supreme court declined to
apply the public-interest exception and
dismissed the appeal as moot. Eckersall
was a divorce case in which the wife
appealed an interlocutory order that
regulated the terms and conditions of
her visitation with the couple’s minor
children. The appellate court had dismissed the appeal for lack of jurisdiction,
holding that the visitation order had not
granted any “injunctive relief” and was
therefore not appealable under Supreme
Court Rule 307(a)(1). Eckersall, 2015
IL 117922, ¶ 6 (citing In re Marriage
of Eckersall, 2014 IL App (1st) 132223,
¶ 31).
Shortly after the appellate court dismissed the appeal, however, the circuit
court had entered an order finalizing the
parties’ dissolution-of-marriage proceedings and superseding the interlocutory
visitation order that was the subject of the
appeal. The supreme court recognized
that the final dissolution order prevented
it from granting any relief from the visitation order, rendering the appeal moot.
Id. ¶ 10. But while the parties agreed that
the appeal was moot, the (by then former)
wife urged the supreme court to resolve it
anyway, arguing that even though it was
moot, the public-interest exception to the
mootness doctrine enabled the court to
decide the case. Id. ¶ 11.
The supreme court examined the
three criteria that must be met before a
reviewing court may apply the exception: “(1) the question presented is of
a substantial public nature; (2) there is
a need for an authoritative determination for the future guidance of public
officers; and (3) there is a likelihood of
future recurrence of the question.” Id.
(citing Felzak v. Hruby, 226 Ill. 2d 382,
393 (2007)). The court emphasized that
the exception is “narrowly construed,”
and requires a “clear showing” of each
criterion. Id. (citing In re Adoption of
Walgreen, 186 Ill. 2d 362, 365 (1999)).
The court found that none of the
criteria were satisfied. The “substantial
public nature” factor required a clear
showing “that the issue is of ‘sufficient
breadth, or has a significant effect on the
public as a whole.’” Id. ¶ 15 (quoting
Felzak, 226 Ill. 2d at 393). Though the
wife described the “form” order at issue
in the appeal as frequently used, the court
found that such orders were only used in
dissolution proceedings in Cook County
and only when the parties could not agree
on the terms and conditions of visitation.
The appeal did not satisfy the first factor,
the court held, because the order had “a
limited application to a small group of
About the Author
Scott L. Howie is a partner at Pretzel & Stouffer,
Chartered, in Chicago,
specializing in post trial
and appellate practice
in the state and federal
courts. He received his
undergraduate degree
from Northwestern University in 1989 and his law degree from ChicagoKent College of Law in 1994. Mr. Howie is a
member and past director of the Illinois Appellate
Lawyers Association, where he co-chairs the
Moot Court Committee.
people and [did] not significantly affect
the public as a whole.” Id.
Nor was there clear evidence of
any need for an authoritative guidance
on the issue. While the court suggested
that this second factor might have been
satisfied by a showing of “conflicting
precedents” or a split of authority requiring resolution, there appeared to be no
such legal conflict. Id. ¶ 16. Similarly, the
court found that the apparent absence of
litigation on the subject also meant that
there was no showing that it was likely
to recur. Id.
With none of the criteria satisfied,
the supreme court found no basis for
applying the public-interest exception,
and suggested that cases in this area are
typically unsuited to the exception: “Issues that arise in dissolution of marriage
proceedings tend to be very fact specific
and do not have broad-reaching implications beyond the particular dissolution
of marriage proceedings.” Id. ¶ 19.
Concluding that it had “improvidently
granted” the petition for leave to appeal,
the court dismissed the appeal as moot.
Id. ¶ 21. The court mentioned but did not
address a different argument, made by
amicus curiae the American Academy
of Matrimonial Lawyers, that the publicinterest exception allowed the court to
decide whether the visitation order was
appealable as an injunction. See id. ¶ 13.
Appeal Moot, but Public-Interest
Exception Applies, in Cordrey v.
Prisoner Review Board
In another recent case, the supreme
court found that the public-interest
exception to the mootness doctrine
allowed it to address the merits of a
prisoner’s mandamus action, even
though the action had been rendered
moot when he was released during the
appeal. In Cordrey v. Prisoner Review
Bd., 2014 IL 117155, ¶ 17, the petitioner
was a prisoner who sought leave to file a
complaint for mandamus in the supreme
court pursuant to Supreme Court Rule
381. He had been paroled, but it was a
requirement of his parole that he serve a
period of mandatory supervised release
at a suitable location. Because no suitable
location was available to him, he was
immediately deemed to be in violation
of his parole, taken back into custody,
and forced to serve his term of mandatory supervised release in prison. His
mandamus complaint challenged this
practice—which was common enough to
be known colloquially as “violating at the
door”—as an unconstitutional violation
of his rights to due process and equal
protection. Cordrey, 2014 IL 117155, ¶ 1.
By the time the supreme court ruled
on his petition, he was no longer under
mandatory supervised release and was no
longer an inmate, so the court was unable
to grant him the relief he requested.
Id. ¶ 12. The petitioner, however, had
anticipated this circumstance, and argued
that the public-interest exception would
enable the court to resolve the constitutionality of “violating at the door” despite
his own release. Id. ¶ 13.
The court recalled that it had previously addressed another issue related to
mandatory supervised release even after
another prisoner’s release had rendered
the issue moot as to that prisoner. Id. ¶ 15
(citing Holly v. Montes, 231 Ill. 2d 153,
158 (2008)). In the earlier case, the court
had observed that because so many prisoners would be on mandatory supervised
release at least once, there were a “vast
number of felons potentially affected”
by practices related to such release. Id.
(quoting Holly, 231 Ill. 2d at 158). The
issue therefore had a substantial public
nature and a likeliness of recurrence,
satisfying the first and third criteria of
the public-interest exception. Id. (quoting
Holly, 231 Ill. 2d at 158). In the earlier
case the court had also recognized the
“substantial litigation” concerning the
issue in Illinois and federal courts,
satisfying the second prong. Id. ¶ 16
(citing Holly, 231 Ill. 2d at 158).
In Cordrey, the court cited a long
list of cases challenging “violating at the
door,” and reiterated that a large number
of offenders might potentially be affected
by that practice. Id. ¶ 17 (collecting
cases). These factors, the court held,
satisfied the public-interest exception
to the mootness doctrine, and called for
the court to address the merits of the
petitioner’s argument. Id. In the end,
the court denied his petition, however,
concluding that he had failed to establish
a clear right to mandamus. Id. ¶39-40.
Appeal not Moot in
Jackson-Hicks v. East St. Louis
Board of Election Commissioners
In a third recent case, the supreme
court found that an appeal in an election
case was not moot at all, despite the
substantial administrative difficulties involved in the relief the appellant sought.
Jackson-Hicks v. East St. Louis Bd. of
Election Comm’rs, 2015 IL 118929.
The dispute arose during the campaign
for the 2015 mayoral election in East
St. Louis, Illinois, when one candidate
filed an objection to the incumbent’s
nominating petitions, arguing that they
did not contain enough valid signatures
for his name to be placed on the ballot.
Jackson-Hicks, 2015 IL 118929, ¶ 5.
Both the Election Board and the circuit
court overruled the challenger’s objections, and by the time the appellate court
affirmed those decisions, less than two
Appellate Practice Corner | continued
months remained before the election.
Id. ¶ 9 (citing Jackson-Hicks v. East St.
Louis Bd. of Election Comm’rs, 2015 IL
App (5th) 150028).
The supreme court granted the
challenger’s petition for leave to appeal
on an expedited basis. In addition to
defending himself on the merits, the
incumbent contended that preparations
for the impending election had made
the appeal moot. Id. ¶ 12. The supreme
court rejected his contention, stating
the standard for mootness: “A case on
appeal becomes moot where the issues
presented in the trial court no longer
exist because events subsequent to the
filing of the appeal render it impossible
for the reviewing court to grant the
complaining party effectual relief.” Id.
(citing Cinkus v. Village of Stickney Mun.
Officers Electoral Bd., 228 Ill. 2d 200,
207-08 (2008)).
Though the election was by then
barely three weeks away, the court found
that because it had not yet been held, the
court was still able to grant “effectual
relief.” It was possible, “theoretically at
least,” for new ballots to be printed and
any electronic voting machines to be
reprogrammed—and even if it was too
late to do so, election officials could be
ordered to disregard any votes cast for an
ineligible candidate, including any such
votes on absentee ballots already cast. Id.
¶ 15 (citing Delgado v. Bd. of Election
Comm’rs, 224 Ill. 2d 481, 489 (2007);
Bryant v. Bd. of Election Comm’rs, 224
Ill. 2d 473, 480 (2007)). The court called
it “unfortunate” that absentee ballots
could have already been cast for the
incumbent, “but absentee voting and
difficulty in notifying voters of ballot
changes are common and unavoidable
consequences of the narrow time frame
in which election contests must be prosecuted.” Id. ¶ 16. These circumstances
In addition to observing that the incumbent’s name
still could be removed from election materials and
votes already cast for him could be disregarded, the
court also noted that the difficulty of doing so was not
enough “to foreclose further judicial review of a timely
and procedurally proper election challenge which
concludes before the election cycle has ended.”
were not enough to make the appeal
moot, the court held, because if they
were, “meaningful judicial oversight of
the electoral process would be all but
impossible, and we would be powerless
to prevent the election of candidates
who failed to meet the requirements of
the law.” Id.
Indeed, despite recognizing the practical consequences of granting the relief
the challenger sought so shortly before
the election, the court went on to do
just that. Agreeing that the incumbent’s
nominating petitions were inadequate, it
ordered that his name be removed from
the ballot and that any absentee ballots
already cast for him be disregarded in
determining the winner of the election.
Id. ¶¶ 42-44.
In concluding that the appeal was
not moot, the supreme court considered
it significant that the election had not
yet been held. In addition to observing
that the incumbent’s name still could
be removed from election materials
and votes already cast for him could be
disregarded, the court also noted that the
difficulty of doing so was not enough
“to foreclose further judicial review of
a timely and procedurally proper election challenge which concludes before
the election cycle has ended.” Id. ¶ 16
(emphasis added). It is likely that the
court would have concluded otherwise
if the election had already been held—
though it might have gone on to consider
whether the public-interest exception
applied. See Bettis, 2014 IL 117050, ¶
8 (“The conclusion of an election cycle
generally renders an election contest
moot.”).
Conclusion
Despite the supreme court’s stated
aversion to reviewing cases merely to
establish precedent, the public-interest
exception reflects the importance of
precedent in a common-law system of
justice. Litigants or insurers often find
themselves returning to court on the
same legal issue in many different cases,
and may have a compelling interest in
establishing precedent on that issue; by
contrast, depending on the case and the
issue, they may wish to avoid establishing such precedent. It is worthwhile to
be aware of such opportunities, and to
be able to advise clients as to whether it
is worth trying pursue an otherwise moot
appeal to a conclusion on the merits—or
trying to prevent an adversary from
doing so.
Civil Rights Update
Bradford B. Ingram
Recent Civil Rights Decisions
This issue’s update covers three
recent court rulings touching heavily on
civil rights claims. One case from the
U.S. Supreme Court, City and County
of San Francisco v. Sheehan, deals with
qualified immunity in the context of an
Americans with Disabilities Act claim,
and a Seventh Circuit Court of Appeals
decision, in Doe v. Village of Arlington
Heights, addresses qualified immunity in
a duty to protect against violence claim.
A second Supreme Court decision, Johnson v. City of Shelby, addresses pleading
requirements in Section 1983 claims.
U.S. Supreme Court Addresses Duty to Provide
Accommodation to an Armed, Violent, and
Mentally Ill Suspect During Course of Arrest
The United States Supreme Court,
in City and County of San Francisco, CA
v. Sheehan, 135 S. Ct. 1765 (2015), discussed whether law enforcement officers
have a duty to provide accommodation
to an armed, violent, and mentally ill
suspect in the course of bringing the
suspect into custody. The Supreme Court
also addressed whether the officers were
entitled to qualified immunity under the
circumstances.
Facts
Theresa Sheehan lived in a group
home for people dealing with mental
illness. She was supervised by social
workers, one of whom attempted to
visit Sheehan to conduct a welfare check.
When the social worker knocked on
Sheehan’s door, he received no answer.
Sheehan, 135 S. Ct. at 1769. The social
worker used a key to enter the room.
Sheehan sprang up and threatened to
kill the social worker. Id. at 1769-70.
The worker shut the door and called the
police for help. He took steps to clear the
building of other people and to complete
an application to have Sheehan detained
for temporary evaluation and treatment.
Officer Holder arrived and reviewed
the temporary detention application and
spoke with the social worker. Id. at 1770.
After another officer was summoned, they used the key to enter the
room. Sheehan reacted violently, grabbed
a kitchen knife with a five inch blade and
began approaching the officers indicating
she was going to kill them. The officers
did not have their weapons drawn and
retreated and closed the door with
Sheehan in the room. Id. After calling for
backup, the officers became concerned
that while the door was closed, Sheehan
might gather more weapons. The officers
decided the situation required immediate
attention and chose to reenter. They did
not pause to consider whether Sheehan’s
disability should be accommodated. The
officers knew Sheehan was not well, but
the officer believed that was a secondary
issue given the fact that they were faced
with a violent woman who threatened to
kill her social workers. Id. at 1770-71.
Upon re-entry, the officers drew
their pistols and used pepper spray on
Sheehan. Sheehan had a knife in her hand
and yelled for them to leave, threatening
to kill them. Sheehan did not drop the
knife despite pepper spray to her face, so
Officer Holder shot her twice, but she did
not collapse. Another officer then fired
multiple shots. She finally fell and a third
officer, who had just arrived, kicked the
knife out of her hand. She was prosecuted
in San Francisco for assault with a deadly
weapon, assault on a police officer with
a deadly weapon, and making criminal
threats. A jury acquitted her of making
threatsand was unable to reach a verdict
on the other counts. She was not retried.
Id. at 1771.
Sheehan then brought a lawsuit
alleging that the officers violated the
Americans with Disabilities Act of
1990 (ADA), 42 U.S.C. § 12101 et
seq., because they failed to reasonably
accommodate her disability. She also
sued under 42 U.S.C. § 1983, alleging
violation of her Fourth Amendment
rights because the officers did not use
practices designed to minimize the risk
of violence when dealing with mental
illness. Id.
About the Author
Bradford B. Ingram is a
partner with Heyl, Royster,
Voelker & Allen, P.C. 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.
Civil Rights Update | continued
The court interpreted San Francisco’s argument on
appeal as predicated on the proposition that the
ADA governs the manner in which qualified
individuals with a disability are arrested.
The district court granted summary
judgment, relying on Hainze v. Richards,
207 F.3d 795 (5th Cir. 2000), which
held that officers making an arrest were
not required to first determine whether
their actions would comply with the
ADA before protecting themselves and
others. Id. The district court also held
the officers did not violate the Fourth
Amendment because they had no way of
knowing whether Sheehan might escape
through the back window or whether
there was anyone else in the room that
she might hurt. The officers used deadly
force only after the pepper spray was not
sufficient force to contain the situation.
Id. at 1771-72.
The United States Court of Appeals
for the Ninth Circuit held the ADA covers
public services, programs, or activities
and that the ADA’s accommodation
requirement should be read to encompass
anything the public entity does. The
Ninth Circuit concluded it was for the
jury to decide whether the officers should
have accommodated Sheehan by passage
of time to diffuse the situation rather than
precipitating a deadly confrontation.
Id. at 1772. The Ninth Circuit held that
the officers’ initial entry into Sheehan’s
room was lawful and after the officers
opened the door for the second time,
they reasonably used their firearms
when pepper spray failed to stop the
advance. The panel also found that the
jury should decide whether the officers
provoked Sheehan by needlessly forcing
the second confrontation. Id. The dissent
believed the officers were entitled to
qualified immunity. Id.
ADA Accommodation Issue Not
Properly Presented or Argued
San Francisco and the officers
petitioned for a writ of certiorari to
review two questions. Id. The first
concerned whether the ADA “requires
law enforcement officers to provide
accommodations to an armed, violent,
and mentally ill suspect” during the
course of an arrest. Id. After reviewing
the case history, the court found that San
Francisco relied on a different argument
than that made in the lower courts. San
Francisco focused on the statutory phrase
“qualified individual,” but that argument
did not appear in San Francisco’s certiorari petition. Id. at 1772-73. The court
ordinarily does not decide questions that
were not passed on below. Of interest,
the new argument effectively conceded
that relevant provisions of the ADA
may require law enforcement officers
to provide accommodation. Id. at 1773.
The court interpreted San Francisco’s argument on appeal as predicated
on the proposition that the ADA governs
the manner in which qualified individuals
with a disability are arrested. The court
held that the question of whether the
ADA applies to an arrest is an important
question that would benefit from briefing
and adversary presentation. Id. Since
San Francisco, the amicus brief from the
United States, and Sheehan all argued
or at least accepted that it applied, there
was nothing for the court to decide. Id.
As a result, the Supreme Court found that
it would not be prudent to decide that
question in this case. Because certiorari
jurisdiction exists to clarify law, it is not
a matter of right, but judicial discretion
in accordance with Supreme Court Rule
10. Here the Supreme Court exercised
that discretion and dismissed the first
question as improvidently granted. Id.
at 1773-74.
This issue is interesting for municipalities and law enforcement entities to
consider given the Supreme Court’s
discussion, even though it did not decide
the issue. Officer training should include
at least consideration of the ADA, as
officers face a variety of arrest situations.
Fourth Amendment
Constitutional Analysis
The second question before the
court concerned Sheehan’s allegations
pursuant to 42 U.S.C. § 1983. Here, the
Supreme Court disagreed with the Ninth
Circuit’s ultimate conclusion, although
it did agree with many aspects of its
analysis. The Supreme Court found the
officers did not violate any federal right
when they opened Sheehan’s door for
the first time. Id. at 1774. The officers
knocked on the door, announced they
were police officers, and informed
Sheehan they wanted to help her. When
Sheehan did not come to the door, they
entered the room. Id. The Supreme Court
held this was not unconstitutional, as law
enforcement officers may enter a home
without a warrant to render emergency
assistance. Had Sheehan not been disabled, the officers could have opened the
door a second time without violating her
constitutional rights. Id. at 1775.
Moreover, the two entries were part
of a single, continuous search or seizure.
The officers were not required to justify
the continuing emergency with respect
to the second entry. Id. The officers also
knew Sheehan had a weapon and had
threatened to use it to kill people. They
knew that any delay could make the
situation more dangerous. The Fourth
Amendment standard is reasonableness,
and it is reasonable for the police to move
quickly if delay would endanger their
lives or the lives of others. Id.
The Supreme Court agreed with
the Ninth Circuit that after the officers
opened Sheehan’s door for the second
time, their use of force was reasonable.
The officers tried to subdue her with pepper spray, and because she kept coming,
the use of deadly force was justified.
The Supreme Court found nothing in
the Fourth Amendment prohibits officers
from protecting themselves, even if it
means firing multiple rounds. Id.
The Supreme Court further found
that the officers’ failure to accommodate
Sheehan’s mental illness did not violate
clearly established law. Id. The officers
had every reason to believe that their
conduct was justified. There was no
consensus of persuasive case authority
that would support Sheehan’s claim that
she had a right to accommodation during
the arrest. The officers were entitled to
qualified immunity because they had
no fair and clear warning of what the
Constitution required. Id. at 1778.
The Supreme Court’s qualified immunity analysis was the ultimate basis
for its decision. While it chose not to
decide the accommodation issue under
the ADA, the language suggests there
would be no duty under facts similar to
this case. This interesting decision by the
Supreme Court puts defense counsel on
alert that plaintiffs may pursue claims in
the future based on an officer’s failure to
accommodate certain disabilities of the
suspects they arrest.
Seventh Circuit Addresses Qualified Immunity
and Rule 12(b)(6) Motions: No Duty to Protect
Against Private Violence
The United States Court of Appeals
for the Seventh Circuit’s recent decision
in Doe v. Village of Arlington Heights,
782 F.3d 911 (7th Cir. 2015), affirmed
the district court’s grant of qualified
immunity at the Rule 12(b)(6) motion
stage for Officer Mark Del Boccio and
the Village of Arlington Heights. The
plaintiff Jane Doe brought a claim under
42 U.S.C. § 1983 against the village and
the officer arising out of the officer’s
response to a 9-1-1 call. When the officer
arrived, he encountered the plaintiff and
three males in an intoxicated state. The
officer left Doe with the males, and she
was later sexually assaulted. Doe, 782
F.3d at 913.
Facts
The plaintiff was a minor female
who was drinking with a group of
teenagers at an apartment complex.
The site manager called 9-1-1 to report
their activity. When Officer Del Boccio
arrived, one of the males was holding
Doe up from behind because she could
not stand up by herself. Id. Her head was
down and her eyes were closed due to
intoxication. Officer Del Boccio rolled
down his window, talked to the three
males, and allowed them to leave the
scene with plaintiff. The site manager
spoke to the officer, and the officer stated
that the three males were taking the
plaintiff home. The officer then left the
scene. The officer did not ask the plaintiff
or any of the males for identification. He
reported to dispatch that he had checked
the scene and the subjects of the 9-1-1
call were gone upon arrival. Id. He also
called off Officer Spoerry, who had also
been dispatched to the scene. After Officer Del Boccio left the scene, the three
males carried the plaintiff into a laundry
room of the complex. The site manager
observed this and called 9-1-1 again.
A Mount Prospect officer responded to
this call and, upon entering the laundry
room, caught the three males sexually
assaulting the plaintiff. Id.
The defendants moved to dismiss
the complaint for failure to state a claim.
They alsoargued Officer Del Boccio
was entitled to qualified immunity and
that there was no constitutional duty to
protect the plaintiff. The district court
granted the motion. Id. at 914.
Qualified Immunity
The Seventh Circuit reiterated that
qualified immunity shields a government
official from liability for damages when
the official’s conduct does not violate
clearly established statutory or constitutional rights of which a reasonable
person would have known. Id. at 915.
The Seventh Circuit applied a two part
test to determine whether the officer was
entitled to qualified immunity. First, the
court needed to determine whether the
facts, viewed in light most favorable
Civil Rights Update | continued
to the injured party, demonstrated that
the conduct of the officer violated a
constitutional right. Second, it needed to
determine whether the right was clear at
the time the conduct occurred. Id. citing
Hardaway v. Meyerhoff, 734 F.3d 740,
743 (7th Cir. 2013).
The plaintiff alleged that the officer
violated her constitutional rights by
failing to adequately investigate the 9-1-1
complaint, by preventing other officers
from arriving at the scene (Officer
Spoerry who was dispatched and called
off), and by falsely reporting to dispatch
that the subjects of the 9-1-1 call were
gone upon arrival. The officer argued that
no clearly established law put the officer
on notice that any of his alleged conduct
violated Doe’s constitutional rights. Id.
“Clearly established,” the court
found, means whether it would be clear
to a reasonable officer that his conduct
is unlawful under the circumstances. The
plaintiff bears the burden of establishing
that a right is clearly established. Here,
Doe failed to identify any factually
similar case that would have provided a
reasonable officer with notice that he had
a constitutional duty to protect her in the
situation Officer Del Boccio encountered
upon arrival. Id.
The plaintiff also argued the district
court erred in granting the officer qualified immunity at the pleading stage.
The Seventh Circuit made it clear that
resolving immunity questions at the
earliest possible stage in litigation
is important. Id. at 915-16, citing
Saucier v. Katz, 533 U.S. 194, 201
(2001). Considering a Rule 12(b)(6)
motion to dismiss based upon qualified
immunity may be inappropriate in some
casesbecause a qualified immunity
defense usually depends on the facts
of the case. However, in some cases it
is proper. Id. at 916, citing Chasensky
v. Walker, 740 F.3d 1088, 1095-97 (7th
Cir. 2014).
Here, the district court correctly
determined it was not clearly established
law that calling off another officer or
falsely reporting to dispatch the scene
was clear violated the plaintiff’s constitutional rights. Id. Officer Del Boccio was,
therefore, entitled to qualified immunity
and dismissal was proper. Id.
Due Process Claim
The Seventh Circuit also addressed
the plaintiff’s potential due process
claim. Relying on DeShaney v. Winnebago County Dept. of Social Services,
489 U.S. 189, 197 (1989), it held that a
state’s failure to protect an individual
against private violence is not a violation of the due process clause. Id. Due
process, it said, is designed to protect
people from the state, not to ensure the
state protects them from each other.
Here, Doe had no affirmative right to
governmental aid, even if that aid was
necessary to secure or protect life, liberty
or property interests. Id.
The Seventh Circuit also addressed
two exceptions to DeShaney. Id. The
first exception applies where the state
has a special relationship with a person.
The second exception, which is viewed
narrowly, involves situations where the
state creates a danger, and liability can
exist when the state affirmatively places
a person in a position of danger. Id.
The court found that Officer Del
Boccio did not create a danger to Doe,
nor did he do anything to make her
situation worse. When he left Doe with
the three young males, he left Doe in
the same position she was in when he
arrived. Id. at 918. The officer’s conduct
did not turn a potential danger into an
actual one. Doe was in actual danger
already, and the officer had no constitutional duty to protect her. Id.
The Seventh Circuit rejected the
plaintiff ’s argument that discovery
would have allowed her to uncover facts
to support the “state created danger”
exception. Her complaint contained no
allegations to support such a theory (for
example, that Officer Del Boccio made
statements to encourage or embolden the
rape). The court rejected this argument as
implausible on its face. Id. at 919.
This case provides defense counsel
a good overview of qualified immunity
law. It also provides support for raising
qualified immunity at the motion to
dismiss stage.
U.S. Supreme Court Addresses
Pleading Standard for
Section 1983 Claims
In Johnson v. City of Shelby, Mississippi, 135 S.Ct. 346 (2014), the United
States Supreme Court held that failure to
invoke 42 U.S.C. § 1983 in the complaint
did not bar relief under the statute.
The plaintiffs, who worked as police
officers for Shelby, Mississippi, alleged
they were fired by the city’s board of
aldermen because they brought to light
criminal activities of one alderman.
Johnson, 135 S. Ct. at 346. The officers
alleged that their Fourteenth Amendment
due process rights were violated and they
sought compensatory relief. The district
court entered summary judgment against
the officers. That judgment was affirmed
by the United States District Court for the
Fifth Cricuit based upon the plaintiffs’
failure to invoke 42 U.S.C. § 1983 in
their complaint. Id. The fifth circuit held
that that the complaint must expressly
invoke section 1983, and that this is
not simply a pleading formality. Such
a requirement, the fifth circuit noted,
Workers’ Compensation Report
served a notice function because certain
consequences flow from claims under
section 1983, such as the unavailability
of respondeat superior liability which
bears on the qualified immunity analysis.
Id. at 347.
The United States Supreme Court
summarily reversed, holding the federal
pleading rules require only a short, plain
statement of the claim showing the
pleader is entitled to relief. Id. at 346.
According to the Court, a plaintiff’s
complaint should not be dismissed for
an imperfect statement of the legal theory
supporting the claim. The objective of
the rule is to avoid civil cases turning
on technicalities. There is no heightened
pleading standard that requires a plaintiff
seeking damages for violations of
constitutional rights to invoke section
1983 expressly in order to state a claim.
Federal courts may not apply a standard
more stringent than the usual pleading
requirements of Rule 8(a). Id. at 347.
Referring to Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v.
Iqbal, 556 U.S. 662 (2009), the Court
reiterated its previous statements on
standards for proper pleading. Id.
The Supreme Court concluded that
the plaintiffs’ complaint was not deficient
and that it stated simply, concisely, and
directly the events that allegedly entitled
the plaintiffs to damages from the city.
Having informed the city of the factual
basis of the complaint, the plaintiffs were
not obligated to do more to stave off
a threshold dismissal for want of an
adequate statement of their claim. Id. The
Court reversed and directed the district
court to allow the plaintiffs to add a citation to section 1983 to the complaint. Id.
Johnson provides a blunt confirmation of
the liberal pleading requirements.
Bradford J. Peterson
Heyl, Royster, Voelker & Allen, P.C., Urbana
Estate Entitled To Recover Accrued
PPD Benefits Regardless
of The Existence of Dependents
In Bell v. Illinois Workers’ Compensation Comm’n, 2015 IL App (4th)
140028WC, Mary Nash sustained accidental injuries arising out of her employment on January 30, 2008. 2015 IL App
(4th) 140028WC, ¶ 4. She fractured her
femur and undertook open reduction and
internal fixation. Id. Although the femur
fracture healed without complication,
she remained too weak to walk without
assistance. Id. ¶ 5. A suspected rheumatological or neurological condition, which
pre-existed the accident, contributed to
her inability to ambulate without use of
a cane. She was evaluated by neurologist
Conrad Wiehl who suspected a form of
muscle dystrophy and concluded that she
reached MMI for her work related injury
as of August 27, 2008. Id. ¶ 8. Dr. Russell
Cantrell performed an independent medical evaluation and likewise concluded
that Nash had reached maximum medical
improvement. Id. ¶ 6. Prior to arbitration
on August 19, 2010, Nash died of causes
unrelated to her work related injuries.
Id. ¶ 10. An Amended Application for
Adjustment of Claim was filed by Nash’s
sister as administrator of her estate. Id.
¶ 10. Nash left no surviving spouse or
dependents. Id. ¶ 14. Nash’s sister, Janet
Bell, sought underpaid TTD benefit,
as well as medical expenses and PPD
benefits. Id. ¶¶ 12-13.
At arbitration, testimony was introduced regarding the affects of the injury
on the petitioner’s ability to ambulate.
Upon hearing, the arbitrator awarded
temporary total disability benefits, as
well as medical expenses. Id. ¶ 1. The
arbitrator further concluded that although
the petitioner suffered from permanent
partial disability secondary to her work
injury, those benefits that had accrued
prior to her death had abated with her
death and therefore no such benefits
were awarded. Id. ¶ 1. The Workers’
Compensation Commission unanimously affirmed and the commission’s
ruling was confirmed by the Cole County
Circuit Court. Id. ¶ 2.
Relying on Sections 8(e)(19) and
8(h) the Commission found that the
estate was not entitled to PPD benefits
About the Author
Bradford J. Peterson is
a partner in the Urbana
office of Heyl, Royster,
Voelker & Allen, P.C. Mr.
Peterson concentrates his
practice in the defense of
workers’ compensation,
construction litigation, auto
liability, premises liability,
and insurance coverage issues. In recent years,
Mr. Peterson has become a leader in the field
on issues of Medicare Set Aside trusts and
workers’ compensation claims. He has written and spoken frequently on the issue. He
was one of the first attorneys in the State of
Illinois to publish an article regarding the application of the Medicare Secondary Payer Act
to workers’ compensation claims, “Medicare,
Workers’ Compensation and Set Aside Trusts,”
Southern Illinois Law Journal (2002).
Workers’ Compensation Report | continued
even where a portion of those benefits
accrued prior to death.
The appellate court disagreed. Section 8(e)(19) provides:
In a case of specific loss and
the subsequent death of such
injured employee from other
causes than such injury leaving a
widow, widower, or dependents
surviving before payment or
payment in full for such injury,
then the amount due for such
injury is payable to the widow
or widower and, if there be no
widow or widower, then to such
dependents, in the proportion
which such dependency bears
to total dependency.
820 ILCS 305/8(e)(19).
In addition, Section 8(h) provides:
In case death occurs from any
cause before the total compensation to which the employee
would have been entitled has
been paid, then in case the
employee leaves any widow,
widower, child, parent (or any
grandchild, grandparent or other
lineal heir or any collateral heir
dependent at the time of the accident upon the earnings of the
employee to the extent of 50%
or more of total dependency)
such compensation shall be
paid to the beneficiaries of the
deceased employee and distributed as provided in paragraph
(g) of Section 7.
820 ILCS 305/8(h).
The appellate court concluded
that Section 8(e)(19) and 8(h) merely
established to whom benefits will be
paid if the employee dies with a spouse
or dependents before they have been
fully compensated for their work related
injury. Id. ¶ 19. The court concluded that
the provisions did not limit the ability of
a deceased employee’s estate to collect
accrued, unpaid benefits that were due
and owing at the time of the employee’s
passing. Id. ¶ 19.
The appellate court relied in part
upon the Illinois Supreme Court’s holding in Republic Steel Corp. v. Industrial
Comm’n, 26 Ill. 2d 32 (1962). There the
supreme court ruled that although an
employee’s death extinguishes all payments falling due after the employee’s
death, an administrator of the claimant’s
estate may recover for the “payments
accrued to the date of death.” Republic
Steel, 26 Ill. 2d at 46.
The appellate court disagreed with
the Commission finding that Republic
Steel Corp. stood for the proposition that
the employee’s estate lacks standing to
collect accrued benefits as such benefits
can only be paid to dependents. Bell,
2015 IL App (4th) 140028WC, ¶ 24.
Similarly, the appellate court rejected the
respondent’s argument that the holding in
Republic Steel Corp. had been overruled
by the 1975 amendment to Section 8(h).
The appellate court disagreed arguing
that Section 8(h) by its expressed language does not address accrued benefits.
Id. ¶ 24.
The appellate court also took issue
with the Commission’s finding that allowing the estate to collect PPD benefits
where there are no dependents “really
serves no purpose.” Id. ¶ 28. The court
concluded that contrary to the Commission’s assertion, “there are good policy
reasons to allow estates to collect unpaid,
accrued benefits.” Id. ¶ 28. They stated
that “a contrary rule would encourage
employers to, litigate and delay the pay-
ment of compensation due a legitimately
disabled individual to a point beyond
his death and thereby defeat his right to
compensation.’” Id. ¶ 28.
The distinction between Sections
8(h) and 8(e)(19) is that the letter applies
to specific losses where as the former
applies to person as a whole. A fair
reading of either provision can lead a
reasonable mind to the conclusion that an
estate should not be allowed to recover
accrued PPD benefits where no widow or
dependents exist. Certainly, the arbitrator, Commission and the circuit court all
concluded that an estate should not be
entitled to recover based upon the plain
language of Sections 8(e)(19) and 8(h).
The court’s ruling in Bell may lead
to further decisions producing results that
appear inconsistent with Sections 8(e)
(19) and 8(h). For example, assume that
the decedent did not leave a surviving
spouse, but left a non-dependent child.
The clear language of Sections 8(e)(19)
and 8(h) suggests that the non-dependent
child should be precluded from recovery.
Under Bell, however, the appellate court
appears to have now created a loophole
that would entitle the non-dependent
child to at least partially recover benefits.
By opening an estate and having the
estate substituted as the petitioner, the
Bell analysis would then suggest that the
non-dependent child would be entitled
to recover benefits although only to the
extent the accrued prior to the decedent’s
passing. This result would appear to be
inconsistent with both the letter and
intent of Sections 8(e)(19) and 8(h).
Unfortunately, the Appellate Court,
Workers’ Compensation Division did not
certify the case for further review by the
Illinois Supreme Court.
Evidence and Practice Tips
Joseph G. Feehan and Brad W. Keller
The Illinois Appellate Court Third
District case of Calabrese v. Benitez, offers defense attorneys a reminder on how
to properly preserve an appeal regarding
a disputed evidentiary issue. Calabrese v.
Benitez, 2015 IL App (3d) 130827. The
appellate court also provides a helpful
analysis of a unique claim in which a
defendant may be entitled to a new trial
because of the bias of the trial court.
Facts
Calabrese involved a car accident
in which the plaintiff was injured. The
plaintiff filed her complaint in Will
County Circuit Court. In response to
written discovery regarding the plaintiff’s medical treatment, the plaintiff
disclosed that she treated with Dr.
Dahlager of Bolingbrook Family Chiropractic. Further, she planned to call Dr.
Dahlager as a witness to testify regarding
his treatment and interpretation of the
various diagnostic studies. Calabrese,
2015 IL App (3d) 130827, ¶¶ 4-5.
The defendant thereafter subpoenaed
the plaintiff’s medical records from her
treating medical professionals, including
Dahlager. No x-rays were included in the
records received from Dahlager. At the
plaintiff’s deposition, she testified that
Dahlager took x-rays of her. The defendant thereafter subpoenaed the plaintiff’s
records from Dahlager on three additional
occasions. The subpoenas asked for any
and all records and reports and included
a non-inclusive list consisting of items
such as X-ray films or other radiological
reports. The coversheet to the subpoena
also instructed the facility to call the
defendant before duplicating any X-rays.
Dahlager again did not produce x-rays
in response to the subpoenas and did
not call to discuss duplication of X-ray
films. The defendant never filed a motion
to compel production of the X-ray films
and reports. Id. ¶¶ 6-7.
Prior to trial, the defendant filed
a motion requesting leave of the court
to take the discovery deposition of
Dahlager. The court denied the defendant’s request, explaining that the
deadline for the defendant to depose the
independent experts had expired and that
the court had entered an order stating the
defendant waived his right to depose the
plaintiff’s independent expert witnesses.
Id. ¶ 8.
The defendant filed a motion in
limine on the first day of trial to bar
any testimony concerning x-rays or
other diagnostic images not previously
disclosed by the plaintiff or produced
responsive to any subpoena. The plaintiff
indicated that she did not attempt to
obtain her X-ray films from Dahlager,
but that she believed Dahlager would
bring X-ray films with him to court, if
any existed. The plaintiff also indicated
that she planned to solicit opinions about
the X-ray films and reports. The court
denied the defendant’s motion to bar
testimony concerning any x-rays or diagnostic images not previously disclosed
or produced. Id. ¶ 9.
At trial, Dahlager brought x-rays
with him and testified regarding the
spinal injury shown in the x-rays. Importantly, the defendant did not object to
the admission of the x-rays or Dahlager’s
testimony regarding the x-rays at trial.
The x-rays were thus admitted without
objection. Id. ¶¶ 10-11.
At the conclusion of trial, the jury
returned a verdict in favor of the plaintiff
for $47,899. The defendant filed a posttrial motion, alleging that the court erred
by admitting X-ray films at trial. The
court denied the post-trial motion. Id.
¶¶ 1, 12. At the hearing on the post-trial
motion, the court made the following
statements:
THE COURT: Well, let me just
say the jury clearly did not make
an error in this case. You know,
this case was—I was actually
rather shocked that negligence
was not admitted when the
plaintiff—when the defendant
put—who had just gotten his license, put his vehicle in reverse
About the Authors
Joseph G. Feehan is a
concentrates his practice
in commercial litigation,
products liability and personal injury defense. He
received his B.S. from Illinois State University
and his J.D. cum laude from the Northern Illinois
University College of Law. Mr. Feehan is a member of the ISBA Tort Law Section Council and
is also a member of the Peoria County, Illinois
State and American Bar Associations. He can
be contacted at [email protected]
Brad W. Keller is an associate in the Peoria office
& Allen, P.C. He practices
primarily in the areas of
business and commercial
litigation and tort litigation. He received his B.A.
in Political Science from
the University of Illinois
in 2007 and his J.D. magna cum laude from
University of Illinois College of Law in 2010.
Evidence and Practice Tips | continued
and backed up without looking
and struck a pedestrian in a
crosswalk. I mean, I don’t know
how clear liability could have
been. So at any rate. Go ahead.
Your [defendant’s] response.
***
I just—frankly, I have to say in
this case I don’t understand why
liability was contested in this
case. You know, I told you that.
***
I mean, there was no basis that I
could imagine that liability was
not clear in this case.
***
And I, frankly, told you that I
thought that that was not a wise
decision to proceed with, you
know, arguing that there was no
negligence in this case because
I just couldn’t fathom what
possible—how that could not
be negligent.
***
So to just—I mean, it was probably one of the most clear-cut
cases in my hundreds of cases
of liability.
I. Testimony Concerning
Undisclosed X-rays
Appellate Decision
The defendant first argued that the
trial court erred by allowing the plaintiff
to utilize the Dahlager x-rays at trial.
The defendant argued that the plaintiff
violated discovery rules when neither
she nor Dahlager disclosed the x-rays.
The plaintiff argued in response that the
defendant had waived the right to object
to the use of the x-rays on appeal by not
objecting at trial. The defendant argued
that he preserved the issue through the
motion in limine that was denied. Id. ¶ 16.
The third district explained that a
motion in limine does not preserve an
issue for review. The court instructed that
when a motion in limine is denied, the
party bringing such motion must make
an objection at trial in order to preserve
the issue on appeal. Id. ¶ 17.
In this case, while the defendant
had filed a motion in limine asking the
court to bar admission of the x-rays,
the defendant failed to object to the
admission of the x-rays or to Dahlager’s
testimony regarding the x-rays. The court
emphasized that the defendant’s counsel
had affirmatively stated “no objection”
when the plaintiff moved to admit the
x-rays. The court thus held that the issue
had been waived. Id. ¶ 18.
Following the denial of the post-trial
motion, the defendant appealed, arguing
that (1) the court erred by allowing the
plaintiff to utilize X-ray films during
trial; (2) the court erred by denying
the defendant’s request to depose the
plaintiff’s treating chiropractor prior
to trial; and, (3) he was entitled a new
trial due to the trial court’s bias. Id. ¶ 2.
Ultimately, the third district rejected all
arguments presented by the defendant
and affirmed the judgment. Id. ¶¶ 28-29.
II. Opportunity to Depose the
Plaintiff’s Treating Physician
The defendant also argued that
that the trial court erred by denying his
request to depose Dahlager. The court
held that the defendant had waived the
issue by not bringing it in his post-trial
motion. The court explained that under
Illinois law, an issue is waived on appeal
if it is not raised in a post-trial motion.
Id. ¶¶ 20-21.
Id. ¶ 24.
III. New Trial Based on Court’s Bias
Finally, the defendant argued that
the trial court erred when it denied his
post-trial motion due to the fact that the
trial court exhibited bias when ruling on
his motion. The defendant claimed that
the court did not agree with the defense
strategy, as evidenced by the statements
quoted above, and ultimately based its
decision on its feelings regarding the
defense strategy. Id. ¶ 24.
In considering this argument, the
third district explained that under Illinois
law, a trial judge is presumed to be impartial, and the party alleging prejudice must
overcome that presumption. The court
further quoted the following excerpt,
which was originally from a United
States Supreme Court case and had been
adopted by the Illinois Supreme Court:
“‘[O]pinions formed by the
judge on the basis of facts introduced or events occurring in the
course of the current proceedings, or of prior proceedings, do
not constitute a basis for a bias
or partiality motion unless they
display a deep-seated favoritism
or antagonism that would make
fair judgment impossible. Thus,
judicial remarks during the
course of a trial that are critical
or disapproving of, or even
hostile to, counsel, the parties,
or their cases, ordinarily do not
support a bias or partiality challenge. They may do so if they
reveal an opinion that derives
from an extrajudicial source;
and they will do so if they reveal
such a high degree of favoritism
or antagonism as to make fair
judgment impossible.’”
Insurance Law Update
Id. ¶ 24 (citing Eychaner v. Gross, 202
Ill. 2d 228, 281 (2002) (quoting Liteky
v. United States, 510 U.S. 540, 555
(1994))).
In Calabrese, the third district felt
that the trial court’s statements at the
hearing on the post-trial motion did not
display a deep-seated favoritism that
would make a fair judgment impossible.
Further, the court explained that the
defendant did not offer any evidence
proving that the bias stemmed from an
outside source. It further pointed out that,
in fact, the judge had clearly based her
opinion on specific facts of the current
proceeding. The court also explained
that the court did not make such comments until after trial, meaning that the
statements could not have prejudiced the
defense. The third district thus denied the
request for a new trial. Calabrese, 2015
IL App (3d) 130827, ¶¶ 25-26.
Conclusion
The Calabrese case offers another
helpful reminder to defense attorneys
who face adverse rulings in a trial as to
how to preserve those evidentiary issues
for appeal. No matter how strong the
argument presented, the proper steps
must be followed in order to ensure that
the appellate court will consider the issue
on appeal.
Additionally, the case offers an
analysis of a bias claim brought against
the trial judge and reveals that parties
making such cases face a very high
standard. For obvious reasons, parties
and attorneys considering such a claim
must understand the standard that they
are facing and must consider the possible
implications of bringing such a claim.
Patrick D. Cloud
Heyl, Royster, Voelker & Allen, P.C., Edwardsville
Additional Limits to the
Targeted Tender Doctrine:
AMCO Insurance Co. v.
Cincinnati Insurance Co.
The targeted (or “selective”) tender
doctrine is a somewhat unique feature
of Illinois insurance law that seems to
constantly create confusion and questions. What is the doctrine? When does
it apply or not apply? What are its limits?
This column briefly provides some illumination about the doctrine, the manner
in which Illinois courts have applied
it, and the growing limitations placed
upon it, as most recently exemplified by
the appellate court’s opinion in AMCO
Insurance Co. v. Cincinnati Insurance
Co., 2014 IL App (1st) 122856.
A Background of the
Targeted Tender Doctrine
The targeted tender doctrine is
seldom found outside of Illinois. Indeed,
as the appellate court recently noted,
Illinois is “one of a very small minority
of states that employ the targeted tender
doctrine,” finding that only Montana and
Washington have also recognized it. See
Illinois School Dist. Agency v. St. Charles
Cmty. Unit School Dist. 303, 2012 IL
App (1st) 100088, ¶ 37. In a nutshell,
“[t]he targeted tender doctrine allows an
insured who is covered by multiple and
concurrent insurance policies to select, or
‘target,’ which insurer he wants to defend
and indemnify him regarding a specific
claim.” River Vill. I, LLC v. Central Ins.
Cos., 396 Ill. App. 3d 480, 486 (1st Dist.
2009). Where an insured has properly
targeted a particular insurer to the exclu-
sion of other insurers, the targeted insurer
has the sole responsibility for providing
a defense and may not seek equitable
contribution from undesignated insurers.
See, e.g., Cincinnati Cos. v. W. Am. Ins.
Co., 183 Ill. 2d 317, 326 (1998). The doctrine is “intended to protect the insured’s
right to knowingly forgo an insurer’s
involvement.” Cincinnati Cos., 183 Ill.
2d at 324. And, it “allows an insured
who has paid for multiple coverage to
protect his interests, namely, keeping
future premiums low, optimizing loss
history and preventing policy cancellation among the insurers he chooses.”
River Village I, 396 Ill. App. 3d at 486.
Since its inception, Illinois courts
have grappled with the scope and
practical application of the doctrine. For
instance, by itself, the mere presence of
an “other insurance” clause seeking to
About the Author
Patrick D. Cloud is an
attorney in Heyl Royster’s
Edwardsville office. Patrick
concentrates his practice
on insurance coverage
litigation, toxic tort matters,
complex civil litigation, and
products liability defense.
As part of his practice, Patrick takes a lead role
in significant pretrial discovery, motions and
briefs, such as those involving federal preemption, forum non conveniens, the Illinois Frye
doctrine, consumer fraud, and insurance coverage litigation pending throughout the Midwest,
including Illinois and Missouri.
Insurance Law Update | continued
spread an insurer’s obligation to provide
coverage among other available insurance does not thwart the doctrine. See,
e.g., John Burns Constr. Co. v. Indiana
Ins. Co., 189 Ill. 2d 570, 577 (2000).
The appellate court has explained, “an
‘other insurance’ clause in a policy will
not automatically reach into coverages
provided under other policies merely
because such other policies are in existence.” Alcan United, Inc. v. West Bend
Mut. Ins. Co., 303 Ill. App. 3d 72, 81
(1st Dist. 1999). Instead, the “insured
still must be given the right to determine
whether it wishes to invoke its rights
to such other coverages before those
coverages become accessible under the
‘other insurance’ provision of a triggered
policy.” Alcan United, 303 Ill. App. 3d
at 81. Similarly, in the appropriate circumstances, the targeted tender doctrine
allows an insured to deactivate “coverage
with a carrier previously selected for
purposes of invoking exclusive coverage
with another carrier.” Id. at 83.
However, Illinois courts have also
limited the doctrine in other important
ways. The doctrine does not permit an
insured to target an excess insurer over
a primary insurer. See Kajima Constr.
Servs. v. St. Paul Fire & Marine Ins. Co.,
227 Ill. 2d 102 (2007). As the Illinois
Supreme Court has stated, “[e]xtending
the targeted tender rule to require an
excess policy to pay before a primary
policy would eviscerate the distinction
between primary and excess insurance.”
Kajima, 227 Ill. 2d at 116; see also River
Village I, 396 Ill. App. 3d 480 (extending
the Kajima rule to a scenario where an
insurer was excess by operation of an
“other insurance” clause, rather than due
to the provision of a pure excess policy).
Likewise, Illinois courts have held
that the targeted tender doctrine is limited
to situations where multiple concurrent
primary insurers exist. They have been
reluctant to extend the targeted tender
doctrine to situations involving multiple
consecutive primary insurers. See Ill.
School Dist. Agency, 2012 IL App (1st)
100088, ¶ 45. Finally, as discussed below,
in AMCO Insurance Co. v. Cincinnati
Insurance Co., the appellate court most
recently held that the doctrine does not
allow an insurer to deselect itself as the
targeted insurer—even if it has taken an
assignment of rights from the insured as
part of a settlement agreement. 2014 IL
App (1st) 122856, ¶ 24-25.
An Insurer Cannot Deselect Itself
After Settlement—Even With
an Assignment of Rights
Like many targeted tender doctrine
cases, AMCO Insurance arose out of a
personal injury at a construction site.
Hartz Construction Company (Hartz),
Van Der Laan Brothers, Inc. (Van Der
Laan), and Cimarron Construction
Company (Cimarron) were contractors
working at Manchester Cove Subdivision. AMCO Ins. Co., 2014 IL App
(1st) 122856, ¶ 3. Hartz was the general
contractor, and Cimarron and Van Der
Laan were subcontractors. Id. Cincinnati
Insurance Company (Cincinnati) had
issued a CGL policy to Hartz; AMCO
had issued a CGL policy to Cimarron;
and Erie Insurance (Erie) had issued a
CGL policy to Van Der Laan. Id. ¶ 4.
Hartz was also named as an additional
insured under both the AMCO and Erie
CGL policies. Id. ¶ ¶ 4, 5.
In March 2007, Kevin Smith sued
Hartz, Cimarron, and Van Der Laan for
personal injuries that he allegedly suffered as a result of his employment at the
Manchester Cove Subdivision. Id. ¶ 3.
After suit was filed, Hartz made targeted
tenders to both Erie and AMCO and
sought insurance coverage solely from
the Erie and AMCO policies, without
recourse to its own policy with Cincinnati
“except as standby coverage.” Id. ¶¶ 4,
5. AMCO accepted the defense of Hartz
under a reservation of rights. Id. ¶ 5.
In 2011, Smith, Hartz, Cimarron,
and AMCO executed a settlement agreement that assigned “any and all rights,
claims and causes of action Hartz and/
or Cimarron have to recover any sums
from [Cincinnati] . . . in connection with
the claims of [the Smith lawsuit] . . .
to AMCO.” Id. ¶ 7. After entering into
the settlement agreement, AMCO sued
Cincinnati for equitable contribution. Id.
¶ 8. In its action, AMCO argued that the
assignment of rights conferred the power
to change the previous targeted tenders
and seek coverage under the Cincinnati
policy. Id. ¶ 16. The trial court disagreed
and dismissed the action against Cincinnati. Id. ¶ 9.
Despite the various arguments of the
parties, the appellate court found the case
rested on a single issue: “whether the targeted tender doctrine allows insurers to
deselect themselves as targeted insurers
following the settlement of the insured’s
underlying lawsuit.” Id. ¶ 24. It held that
the doctrine cannot be interpreted in such
a manner. Id.
First, it reasoned that “Illinois courts
have made it clear that the targeted tender
doctrine should be narrowly applied to
the types of factual situations for which
it was originally intended.” Id. The court
could find no precedent for AMCO’s proposed application of the doctrine—which
weighed against the adoption of AMCO’s
proposed interpretation. Id.
Furthermore, the court explained
that AMCO’s suggested application of
the doctrine would nullify the doctrine
itself, finding:
Young Lawyer Division
The point of the doctrine is to
allow the insured to select which
insurer it wants to target for defense of an underlying lawsuit.
Under AMCO’s interpretation,
a targeted insurer could simply
settle the underlying lawsuit
contingent on the assignment
of the insured’s rights, and
then seek contribution from
every other insurer that was not
originally targeted. The entire
purpose of the targeted tender
doctrine would be eviscerated.
Id. ¶ 25. Finally, the court concluded
that the assignment of rights against
Cincinnati was essentially meaningless
because Hartz had no claim to recover
money from Cincinnati after AMCO
paid the full amount of the settlement. Id.
Conclusion
At very least, Illinois courts have
expressed little desire to expand the
targeted tender doctrine. Some courts
have even expressed skepticism about
the soundness of the doctrine itself. See
Illinois School Dist. Agency v. St. Charles
Cmty. Unit School Dist. 303, 2012 IL
App (1st) 100088, ¶ 37. Accordingly,
while the facts and holding of AMCO
Insurance are interesting, the case can be
included in a broader trend of opinions
keeping the targeted tender doctrine
within its traditional scope. As future
cases appear before the Illinois courts,
an unwillingness to expand the scope
of the doctrine will likely remain, and
one should expect the courts to closely
scrutinize suggestions taking the doctrine
outside of its historical boundaries.
Gregory W. Odom
I am proud to report that the final
event conducted by the Young Lawyers
Division (YLD) during my term as
Chair was a great success. For Law Day
2015, the YLD conducted a mock trial
for fifth-grade students in Ms. Morgan
Belding’s class at Westhaven Elementary
School in Belleville, Illinois. I would like
to extend my deepest thanks to Ms. Belding and Westhaven Elementary School
for graciously allowing us to conduct
the program at the school and to the
students for their time and participation.
I also would like to thank YLD member,
Leslie Warren, of Sandberg Phoenix &
Von Gontard, for all of her assistance in
planning this event and for participating
in the mock trial.
For this event, Ms. Warren and I first
visited the students on April 10, 2015 to
describe what an attorney does and to
discuss the different stages of a trial. I
was overwhelmed by the students’ interest and enthusiasm during this meeting.
For example, while the initial visit was
scheduled to last one hour, we ultimately
met with students for over two hours
because they had many questions and
comments. At the end of our meeting,
we provided the students with a script
for the mock trial.
On May 15, 2015, we returned to
observe the students as they acted out
the mock trial. The mock trial was based
upon a criminal matter where a student
was accused of stealing a laptop from her
school and charged with theft. Students
were assigned to play different roles,
including judge, prosecutors, defense
attorneys, witnesses, and jurors. The
students did a wonderful job acting out
the various roles and had more thoughtful
questions about the legal profession.
Ultimately, the student-jurors returned
a guilty verdict. Congratulations to the
student-prosecutors!
Overall, I found this event to be one
of the most worthwhile conducted by
the YLD during my term as Chair. Not
only did we teach the students many
things about the practice of law, but I
was pleased to learn that the students had
an overwhelmingly positive view of attorneys. Many of the students described
attorneys as being helpful, trustworthy,
and defenders of those in need. One
of the goals of Law Day is to cultivate
respect for the law. It was quite fulfilling
to meet children who already held the
profession in such high regard.
About the Author
Gregory W. Odom is an
Associate with HeplerBroom LLC in Edwardsville.
He focuses his practice on
trials involving complex
business litigation matters, including toxic torts,
personal injury, product
and premises liability, and
environmental law. Mr. Odom has represented
individuals, local businesses, and Fortune 500
companies in Illinois and Missouri state and
federal courts. He has successfully tried multiple
cases to verdict and has successfully argued
before the Illinois Court of Appeals. He received
his J.D. from Southern Illinois University School
of Law in 2008, and a B.A. from Southern Illinois
University magna cum laude in 2005. Mr. Odom
is a member of the Illinois State Bar Association,
The Missouri Bar, Madison County Bar Association, St. Clair County Bar Association, and Illinois
Association of Defense Trial Counsel.
YLD | continued
As discussed in the previous YLD
Quarterly column, my time as YLD
Chair is coming to an end. However, as
I look back on the numerous successful
events the YLD conducted this year, I
have no doubt that the YLD will continue
to successfully cultivate respect for the
legal profession through events such as
the mock trial program, assist young
attorneys in their professional development through a variety of educational
programs, and contribute to our communities through charitable events. To
those who have read the YLD Quarterly
columns during the past year, it should
be clear that the YLD’s success stems
from our members’ ingenuity, efforts,
and willingness to contribute. Thus, I
know that our YLD members are poised
[T]he YLD will continue to successfully cultivate
respect for the legal profession through events such
as the mock trial program, assist young attorneys
in their professional development through a variety
of educational programs, and contribute to our
communities through charitable events.
to have another productive year. Already,
the YLD is working with the Red Cross
to conduct blood drives at the end of
summer and will conduct school supply
drives once schools are back in session.
As I end my term, I look forward to
watching the YLD continue to flourish.
Through this experience, I have made
new friends, met many wonderful people,
and participated in numerous events that
aided in my professional growth. To our
next YLD Chair, I wish you the best of
luck, and please know that the YLD will
always have my support. Association News
IDC Annual Meeting and Awards Luncheon
William K. McVisk of Johnson & Bell, Ltd., Chicago, was elected 2015-2016 IDC Secretary/Treasurer and to a position IDC Officers and Directors Elected
William K. McVisk of Johnson &
Bell, Ltd., Chicago, was elected 20152016 IDC Secretary/Treasurer and to a
position on the Executive Committee at
the Annual Meeting, held June 26, 2015.
McVisk will move up the Executive
Committee ladder to become president
in June 2019.
Other officers on the Executive
Committee include President Troy A.
Bozarth of HeplerBroom LLC, Edwardsville; President Elect R. Mark Mifflin of
Giffin, Winning, Cohen & Bodewes, P.C.,
Springfield; First Vice President Michael
L. Resis of SmithAmundsen, LLC,
Chicago; and Second Vice President
Bradley C. Nahrstadt of Lipe, Lyons,
Murphy, Nahrstadt & Pontikis, Ltd.,
Chicago.
The following members were elected
to new three-year terms on the IDC
Board of Directors: Joseph A. Bleyer,
Bleyer and Bleyer; R. Mark Cosimini of
Rusin & Maciorowski, Ltd., Champaign;
Donald Patrick Eckler of Pretzel &
Stouffer, Chartered, Chicago; Terry A.
Fox of Kelley Kronenberg, Chicago;
Tracy E. Stevenson of Robbins Salomon
& Patt, Ltd., Chicago; and Michelle M.
Wahl of Swanson, Martin & Bell, LLP,
Chicago. Jeremy T. Burton of Lipe,
Lyons, Murphy, Nahrstadt & Pontikis,
Ltd., Chicago, was appointed to fill a
vacant board position.
IDC Presents
Awards
At the Awards Reception, several
members were recognized for their service. Rick Hammond of Johnson &
Bell, Ltd., Chicago, was recognized with
the Distinguished Member Award, and
Gregory W. Odom of HeplerBroom
LLC, Edwardsville, was recognized
with the Rising Star Award. C. William
Busse, Jr. of Busse, Busse & Grassé,
P.C., Chicago, and William K. McVisk
of Johnson & Bell, Ltd., Chicago, were
recognized with President’s Awards, and
Jeremy T. Burton of Lipe, Lyons, Murphy, Nahrstadt & Pontikis, Ltd., Chicago,
was recognized with the Volunteer of the
Year Award.
The Meritorious Service Award was
presented to Hon. Rossana Fernandez
of the Circuit Court of Cook County,
Chicago; Jennifer B. Groszek of CNA,
Chicago; Al Pranaitis of Hoagland,
Fitzgerald & Pranaitis, Alton; and
Heather R. Watterson of CNA, Chicago, for their service on the IDC Board
of Directors.
The Meritorious Service Award
was also presented to Beth A. Bauer of
HeplerBroom LLC, Edwardsville, for
her service as the IDC Quarterly Editor
in Chief; Justin K. Beyer of Seyfarth
Shaw LLP, Chicago, for his service
as the Tort Law Committee Chair; C.
William Busse, Jr. of Busse, Busse &
Grassé, P.C., Chicago, for his service
as Legislative Committee Co-Chair;
William K. McVisk of Johnson &
Bell, Ltd., Chicago, for his service
Association News | continued
as Legislative Committee Co-Chair;
Gregory W. Odom of HeplerBroom
LLC, Edwardsville, for his service as
the Young Lawyers Division Chair; and
Geoffrey M. Waguespack of Butler
Weihmuller Katz Craig LLP, Chicago,
for his service as the IDC Survey of Law
Editor in Chief.
DRI Recognizes
Levitt
David H. Levitt of Hinshaw & Culbertson LLP, Chicago, was recognized
at the IDC Awards Luncheon by DRI
President John Parker Sweeney with the
DRI Exceptional Performance Citation.
This citation recognizes David for having
supported and improved the standards
of education of the defense bar, and for
having contributed to the improvement of
the administration of justice in the public
interest. Congratulations and our sincere
thanks to David for the countless hours
of work on behalf of the defense bar and
the Association!
Busse and McVisk Honored
with President’s Awards
The 2015 IDC President’s Award
recipients are C. William Busse, Jr. of
Busse, Busse & Grassé, P.C., Chicago,
and William K. McVisk of Johnson &
Bell, Ltd., Chicago. IDC President David
Levitt of Hinshaw & Culbertson LLP,
Chicago, selected Busse and McVisk for
the award, which honors individuals who
have demonstrated outstanding service
and commitment to the defense bar.
the Administration, drafting position
papers and leading in the development
of Illinois law. Volunteers like these two
are rare, and their efforts are very much
appreciated.”
C. William Busse, Jr. is the president
of the law firm of Busse, Busse & Grassé,
P.C. He has more than 33 years of legal
experience handling civil jury trials and
appeals. Mr. Busse has concentrated his
Levitt remarks that “It is fitting to
give the President’s Award to our two
“Bills” - McVisk and Busse, because
in the past few years they have done so
much work on evaluating and responding
to “bills” introduced into the Illinois
legislature as Chair and Vice Chair of
IDC’s Legislative Committee. The past
couple of years have been especially
active, and our Bills have helped improve
our visibility with the legislature and
practice in the defense of tort and insurance coverage litigation. He has handled
hundreds of personal injury and wrongful
death cases in various Illinois venues,
including automobile, trucking, premises
liability, product liability, aviation, and
construction injury claims, as well as
fire and explosion and property damage
claims. Mr. Busse served on the Board of
Directors of the Illinois Defense Counsel
from 2002 to 2014 and is a co-author of
“The 50 Year History of the IDC.” Mr.
Busse previously served as the chair
of the Civil Practice Committee and
currently co-chairs the IDC Legislative
Committee.
Busse says, “I am very honored to
be receiving this award and am equally
honored to have served the IDC in our
efforts in Springfield. We have come
very far in the last few years in raising
the profile of our organization with
the General Assembly. We now have a
presence in Springfield and legislators
are now calling us to obtain our opinion
on proposed legislation. I look forward to
serving the IDC during the next legislative session.”
William K. McVisk has more than
30 years of experience in litigation, trials
and claims handling. He is a shareholder
at the Chicago firm of Johnson & Bell,
Ltd., where he focuses on complex
insurance coverage and bad faith litigation and medical malpractice defense.
He represents both policyholders and
insurers in insurance coverage litigation, and has experience in all lines of
coverage, with an emphasis on third
party coverages. He has tried numerous
serious cases, including bad faith cases
and cases with injuries as severe as brain
damage and death.
McVisk has been a member of
the Board of Directors for the Illinois
Association of Defense Trial Counsel
since 2008. He is the Co-Chair of the IDC
Legislative Committee, and previously
served as Chair of the IDC Insurance
Law Committee and was Editor in Chief
of the IDC Quarterly. He is an active
member of the DRI Insurance Law
Committee. He is also the past President
of the Illinois Association of Healthcare
Attorneys.
McVisk says, “I am honored to
receive this award, but have to say that
this was truly a team effort. Since Bill
Busse and I launched the IDC Legislative
Committee, we’ve had tremendous support from the IDC leadership as well as the
other members of the Committee. I know
the Committee will continue to work hard
to be sure that the defense bar is heard on
civil justice issues, as we strive to support
the jury system and ensure a level playing
field for all parties.”
Rick Hammond Receives
IDC Distinguished Member Award
Rick Hammond, of Johnson & Bell,
Ltd. in Chicago, has been named the
recipient of the 2015 IDC Distinguished
Member Award.
Hammond’s involvement in the IDC
has spanned more than twenty years
and has included service as an author,
and later, Editor in Chief of the IDC
Quarterly, a member of the IDC Board of
Directors, and, in 2009-2010, President.
Hammond says, “One of the greatest
compliments that a person can receive is
to be honored by one’s peers. Especially,
as in this case, when those peers are some
of the most accomplished and respected
civil defense attorneys in the state of
Illinois. I’m humbled to join the ranks
of those that came before me, and very
much appreciative to be the recipient of
this award.”
IDC Past President Aleen Tiffany
says, “Rick Hammond has, for many
years, brought such credit to the IDC,
by being an incredibly accomplished
professional, and a fantastic person.
The Rick Hammonds of this world are
prime examples of why the IDC is, and
will continue to be, a premier professional organization. I do not believe
that I have ever seen Rick unprepared in
any setting —be it in his primary areas
of expertise, or otherwise—he is as
cool and calm as they come. And in this
business that is all too important. I was
privileged to have had the opportunity to
really get to know Rick when I joined the
IDC Executive Committee in 2009, the
year in which Rick served as President.
I learned quickly that Rick is blessed not
only with a quiet kindness, but also a
razor sharp wit and acute intellect—and
he uses those gifts with the very highest
level of professionalism and humility.
A daunting combination, to be sure.
I have never known Rick to actually
accept the accolades he deserves; instead
he shares those accolades with those
around him, almost convincing you that
they are more deserving than he, and
that he just happened to be in the ‘right
place’. But rest assured, Rick is a powerful presence, a wonderful friend, and a
colleague that we are fortunate to have
in our ranks. It was with his classic grace
and humility that Rick led the IDC’s
many efforts as President, both legislative and otherwise, exhibiting the type of
excellence that has made, and continues
to make, IDC the premier organization
that it is. I’m just glad he is on our side,
because I for one would hate to oppose
him—and you can tell him that I said, in
a first party bad faith claim or otherwise. I am proud, and feel incredibly blessed,
to call Rick Hammond a good friend and
colleague, one whom I admire for all of
his personal, and professional, qualities.”
Hammond is a shareholder with
the Chicago law firm of Johnson &
Bell, Ltd. He is a member of the firm’s
Executive Committee, co-chairs its
Insurance Coverage Group, and serves
as national counsel on matters relating
to property insurance coverage, fire and
explosion cases, bad faith, and as counsel
to corporate executives, municipalities,
and elected officials on high-profile
business and municipal litigation cases.
He also serves as an Adjunct Professor
on Insurance Law for the John Marshall
Law School, and as an expert witness on
insurer bad faith and insurance law and
coverage issues.
Before practicing law, Hammond
was the Assistant Deputy Director of
the Illinois Department of Insurance’s
Chicago office, and also served as the
Executive Director of a national insurance trade association, the Insurance
Committee for Arson Control (ICAC).
Hammond also held managerial positions
in property claims and agency for two
national insurance carriers.
In addition to being a past president
of the IDC, Hammond formerly served
on the faculty and Board of Directors of
the Insurance School of Chicago, and
he is a columnist for the International
Association of Special Investigation
Units’ (IASIU) magazine, “SIU Today.”
Hammond is a member of the
Federation of Defense and Corporate
Counsel and Vice-Chair of their Property
Insurance Law Committee. He is also
the former Illinois State Representative
of DRI.
In 2008, Hammond was one of two
attorneys in the country selected by
the LexisNexis Insurance Law Center
to receive its “Insurance Lawyer of
the Year Award.” He was recognized
by LexisNexis and his peers as having
effectively advanced insurer positions
and helped to improve insurance law
from the perspective of insurers. Hammond was also recently inducted into
the American College of Coverage and
Extra-Contractual Counsel, an organization that is composed of preeminent
coverage and extra-contractual counsel
in the United States and Canada.
Jeremy T. Burton
Named IDC
Volunteer of the Year
Jeremy T. Burton, a partner with
the Chicago law firm of Lipe, Lyons,
Murphy, Nahrstadt & Pontikis, Ltd.,
has been named the 2015 IDC Volunteer
of the Year. Burton was recognized for
his outstanding contributions to the
IDC, specifically as they relate to the
development and delivery of CLE for
the association.
“Jeremy undertook the mostly
thankless task of leading our Events
Committee—responsible for creating
and running the various seminars (and
there are many) and related events for
Gregory W. Odom
Named 2015
IDC Rising Star
IDC. He did so with particular verve and
competence, and for that time consuming, yet joyfully undertaken, work, we
honor him by turning that thankless job
into one in which we offer considerable and well-earned thanks indeed,”
remarked IDC President David H. Levitt
of Hinshaw & Culbertson LLP.
IDC Executive Director Sandra
Wulf said “Jeremy’s commitment
delivering timely, quality education
to our members was outstanding. He
worked diligently to identify and meet
the needs of IDC membership. He is very
deserving of recognition as the Volunteer
of the Year.”
Jeremy concentrates his practice on
defending product liability and premises
liability, insurance, and commercial matters from filing through their resolution.
He represents settling plaintiffs and
defendants with respect to the Medicare,
Medicaid and SCHIP Extension Act of
2007 and is a frequent speaker regarding
Medicare Secondary Payer requirements
and the Affordable Care Act. Mr. Burton
earned his B.A. degree, cum laude, from
Loyola University Chicago and his J.D.
degree from the University of Wisconsin
Law School.
Edwardsville attorney Gregory W.
Odom is the recipient of IDC’s 2015
Rising Star Award. Odom distinguished
himself as chair of the Young Lawyers
Division (YLD).
“I am incredibly honored to receive
the Rising Star Award. However, this
award, and all of the YLD’s success
over the past year, would not be possible without the creativity, energy, and
commitment of our amazing members.
I am extremely grateful to have had the
opportunity to work, and become friends,
with such wonderful people as Chair of
the YLD,” said Odom.
President David H. Levitt of Hinshaw & Culbertson LLP, Chicago,
remarked, “IDC is extremely lucky,
especially based on what it hears from
other State Defense Bar Associations,
to have a vibrant and enterprising
Young Lawyers Division, exemplified
by Greg Odom. Under Greg’s leadership, the Young Lawyers provided CLE
programs to both young lawyers and law
students, ran charity and blood drives,
and spearheaded a mentorship program.
Greg epitomizes what being a “Rising
Star” is all about.”
Odom focuses his practice on
commercial, premises liability, toxic
tort, and product liability litigation.
Odom received his B.A. from Southern
Illinois University in Carbondale in
2005 and his J.D. from Southern Il-
linois University in 2008. Odom is a
co-chair of the Mentoring-to-Mentoring
Program administered by the IDC and
Illinois Supreme Court Commission on
Professionalism. He also serves as an
arbitrator for the Third Judicial Circuit
Court-Annexed Mandatory Arbitration
Program. In addition to his membership
in the IDC, Odom is a member of the
Madison County and St. Clair County
Bar Associations.
IDC 2015 Annual Meeting
IDC Annual Meeting | continued
We would like to thank the following companies for their generous sponsorship
of IDC’s Annual Meeting and Awards Luncheon!
with
Committee Boot Camp 2015
Thank you to Hinshaw & Culbertson LLP for hosting the
2015 Boot Camp, and thank you to all our volunteers who
participated!
Come join with your friends and
colleagues as we
ring in the holiday season!
Thursday, December 10, 2015
Lloyd’s Restaurant, Chicago
5:30 – 7:30 p.m.
What to Expect
The Illinois Deposition Academy is an
intensive program, designed to give
personal attention and an exceptional
education in deposition techniques.
Students will be assigned to groups
of four and groups will be led by an
experienced defense attorney. Each
student will receive case materials prior
to the Academy and will then receive
individualize break out instruction on
taking and defending depositions including expert depositions based upon “real”
case discovery materials. Not just great
lecturers but on your feet experience.
Registration
Information
Enrollment for the Academy is limited
with registration being accepted on a
first-come, first-served basis.
To guarantee that students receive their
Academy materials in plenty of time
to prepare for the Academy, and due to
the limited enrollment of students, early
registration is highly recommended.
Continuing Legal
Education
We will apply for the following
CLE credit for this program:
Illinois & Indiana..............7.25
Missouri & Wisconsin.......8.80
Academy Chair
Tracy E. Stevenson — Robbins, Salomon & Patt, Ltd.
The Illinois Association of Defense Trial Counsel
is pleased to present its first Deposition Academy designed
specifically for defense counsel. The Deposition Academy is an
excellent means of providing “on your feet” experience for
lawyers who have limited deposition experience or
for those who would like to refine their deposition skills.
Locations
The 2015 Illinois Deposition Academy
will be offered in two locations.
Friday, September 18:
Doubletree by Hilton Collinsville–St.
Louis, 1000 Eastport Plaza Drive,
Collinsville
Friday, October 23:
NIU Naperville Conference Center
1120 East Diehl Road, Naperville
Deposition Academy Schedule
8:00 – 8:10
Welcome & Introductions
11:40 – 12:40 Luncheon
8:10 – 8:30
Faculty Presentation: Basics of Depositions 12:40 – 2:00
This presentation will include the preliminary
instructions, reservation of signature,
reservation of rights, and dealing with the
time constraints of depositions.
8:30 – 8:45
Faculty Presentation: Deposition
Checklists
During this breakout session, Academy
students will be given the opportunity
practice deposing expert witnesses.
2:00 – 2:15
In this presentation, our faculty will outline
the steps for effectively preparing and
conducting a deposition.
8:45 – 9:05
Faculty Presentation: Objections
This presentation will delve into the
objections that counsel may raise during
a deposition, how to respond to those
objections and when to end a deposition and/
or contact a judge for an immediate ruling.
9:05 – 9:25
Faculty Presentation: Personnel &
Technology
In this presentation, our faculty will discuss
the use of court reporters, interpreters, and
video in furtherance of the deposition.
9:25 – 11:25
11:25 - 11:40
Breakout Session: Deposition of an
Expert
Faculty Presentation: Deposition
Strategies
This presentation will cover the strategies
that counsel should consider when in
federal and state court.
2:15 – 2:30
Faculty Presentation: Witness
Preparation
In this program, our faculty will show
students the in’s and out’s of preparing
witness.
2:30 – 4:30
Breakout Session: Preparation for
Deposition and Production of Defendant
at Deposition
During this breakout session, Academy
students will be given the opportunity
practice deposing defendants.
Breakout Session: Deposition of a Plaintiff
Academy Faculty
In this small group breakout session,
Academy students will have the opportunity
to practice deposing plaintiffs.
The Illinois Deposition Academy will feature attorneys
with decades of experience “in the trenches.” We are pleased
to have Jim Ahern of Cassiday Schade LLP, Laura Beasley
of Joley, Oliver & Beasley P.C., Jeremy Burton of LipeLyons,
Ltd., Brian Henry of Pretzel & Stouffer, Chtd., Denny Marek
of Ackman, Marek, Meyer, Tebo and Coghlan, Ltd., Mark Mifflin of Giffin, Winning, Cohen & Bodewes, P.C., Nicole Milos
of CremerSpina LLC and Brad Nahrstadt of LipeLyons, Ltd.
serve as our faculty.
Faculty Presentation: Expert Witnesses
This presentation will cover the do’s and
don’ts of expert witnesses, whether retained
or opposition.
Thank You! Special thanks to our Academy Sponsors:
Deposition Academy
Deposition Academy
Registration
• Designed specifically for defense
counsel
• Provides “on-your-feet” deposition
September 18, 2015
experience
Doubletree by Hilton Collinsville-St. Louis
• Small group settings to provide
one-on-one attention
October 23, 2015
NIU Naperville Conference Center
Registration
IDC Member........... $125
Non-Member........... $275
Attendee Name:
Firm:
Address:
Refund Policy
City, State, Zip Code:
Registration fee refunds must be
Direct Line: ( )
requested in writing and will be made
according to the following schedule:
100% Refund 60 or more days
before Academy
Firm Line: ( )
Email:
Number of Depositions in Past 3 Years:
50% Refund 30-59 days before
Bar Number: IL: MO: IN: WI:
Academy
Special Dietary/Accessibility Needs:
No Refund 0-29 days before
Academy
Registrations may be transferred to
another registrant with notice.
Questions?
Please contact us at [email protected] or
800-232-0169
Payment Information
❑ My check, number is enclosed for $
Please register online at www.iadtc.org
or complete this registration form and return it as soon as possible to:
Illinois Association of Defense Trial Counsel
PO Box 588, Rochester IL 62563-0588
The IDC is proud to welcome the following
members to the Association:
David Albaugh
Sponsored by: Rick Hammond
Brandon W. Lobberecht
Betty, Neuman & McMahon, P.L.C.,
Davenport, IA
Shymane Baker
John Marshall Law School,
Chicago
Ifeanyi C. Mogbana
City of Rockford Department of Law,
Rockford
Jeffrey Bert
Brooks Law Firm, P.C., Rock
Island
Ryan Showalter
Urgo & Nugent, Ltd., Chicago
Rachel J. Brandt
Livingston, Barger, Brandt &
Schroeder, Bloomington
n Sponsor: Peter Brandt
Mark Dinos
Klauke Law Group, LLC,
Schaumburg
Bradley J. Smith
Keefe, Campbell, Biery &
Associates, LLC, Chicago
Gretchen Sperry
Hinshaw & Culbertson LLP,
Chicago
n Sponsor: Brad Elward
Anthea T. Galbraith
Betty, Neuman & McMahon, P.L.C.,
Davenport, IA
Joseph R. Wetzel
Livingston, Barger, Brandt &
Schroeder, Champaign
n Sponsor: Peter Brandt
Stacey Hill
Klauke Law Group, LLC,
Schaumburg
Austin Zimmer
Del Galdo Law Group, LLC,
Berwyn
Kelly A. Kono
Pretzel & Stouffer, Chartered,
Chicago
Gregory Zimmer
Notre Dame Law School,
South Bend, IN
Stevan Krkljes
Law Office of Stevan Krkljes,
Chicago
MEMBERSHIP APPLICATION
Membership in the Illinois Association of Defense Trial Counsel is open to Individuals, Corporations, Educators, and Law Students. For a list
of qualifications, visit www.iadtc.org or phone the IDC office at 800-232-0169. Applicants shall be admitted to membership upon a majority
vote of the Board of Directors.
I am (We are) applying for membership as a(an) (Select Only One):
Individual Attorney, in practice:
Governmental Attorney, in practice:
m 0-3 years ($100)
m 0-3 years ($75)
m 4-5 years ($150)
m 4-5 years ($100)
m 6-9 years ($225)
m 6-9 years ($160)
m 10+ years ($250)
m 10+ years ($190)
mStudent ($20)
mEducator ($75)
Corporation, with:
m 1-2 Affiliates ($250)
m 11-15 Affiliates ($1,000)
m 16-20 Affiliates ($1,500)
Individual Applicant Information – Attorneys & Governmental Attorneys
Prefix
First
Middle
Last
Suffix
Designation
Firm or Government Agency
Address
City
State
Firm or Agency Line
Zip Code
County
Direct Line
Email
Fax Line
Website
Area of Practice
# of Attorneys in Firm
IDC Sponsor Name and Firm
Law School
Admitted to the Bar in the State of
Home Address
City, State, Zip Code
Home Phone
Year
ARDC #
Alternate Email Address
Corporate Applicant Information
Corporation Name
Business or Service Provided
Address
Phone
Fax
Website
On a separate sheet of paper, please list all individuals who are to be affiliated with this Corporate Membership. Be sure to include Name, Address (if different
than the corporate address), Phone, Fax, and Email Address for all affiliates.
Educator and Law Student Applicant Information
Prefix
First
Middle
Last
Suffix
Law School
Address
Email Address
Designation
Anticipated Graduation Date
Phone
Biographical Information
IDC is committed to the principle of diversity in its membership and leadership. Accordingly, applicants are invited to indicate which one of the following
may best describe them:
Race
Gender Birth Date
Free DRI Membership
In addition to joining the IDC, you can take advantage of the DRI Free Membership Promotion! As a new member of the IDC and if you’ve never been
a member of DRI, you qualify for a 1 year free DRI Membership. If you are interested, please mark the box below and we will copy this application and
send it to DRI. Also, if you have been admitted to the bar 5 years or less, you will also qualify to receive a Young Lawyer Certificate which allows you one
complimentary admission to a DRI Seminar of your choice.
m Yes, I am interested in the Free DRI Membership!
54
68- | IDC QUARTERLY | Third Quarter 2013
(Application continued on next page)
COMMITTEE involvement
All Substantive Law Committees are open to any IDC member. Event and Administrative Committees are generally small committees and members are
often appointed by the Board of Directors. Substantive Law Committees are responsible for writing the Monograph for the IDC Quarterly and may submit
other Feature Articles. Committees keep abreast of current legislation and work with the IDC Legislative Committee, as warranted. Committees also serve
as a resource to seminar committees for speakers and subjects and, if and when certain issues arise that would warrant a specific “topical” seminar, the
committee may produce such a seminar.
Please select below the committees to which you would like to apply for membership:
Substantive Law Committees
m Commercial Law
m Construction Law
m Employment Law
m Insurance Law
Administrative Committees
mEvents
mLegislative mMembership
mYoung Lawyers
m Local Government Law
m Tort Law Event Committee
mEvents
Membership Commitment
By providing a fax number and email address you are agreeing to receive faxes and emails from the association that may be of
a commercial nature. I certify that:
mAs an Individual Attorney, I am actively engaged in the practice of law, that at the present time a substantial
portion of my litigation practice in personal injury and similar matters is devoted to the defense.
mAs a Corporate Member, we will support the purpose and mission of the Association.
mI am currently a Professor or Associate Professor of law at an ABA accredited law school.
mI am currently a Student enrolled in an ABA accredited law school.
Signed
Date
Membership Investment
* Recommended Amount:
<3 years in practice.......... $15
4-5 years in practice......... $25
Voluntary Political Action Committee Donation * ................................................... $
6-9 years in practice......... $55
Total Amount Due .................................................................................................... $
10+ years in practice........ $75
Please Note: IDC dues are not deductible as a charitable contribution for U.S. federal income tax purposes, but may be deductible as a
business expense. The IDC estimates that 2.5% of your dues are not deductible because of the IDC’s lobbying activities on behalf of its members.
Membership Dues ..................................................................................................... $
Payment Information
— Do Not Fax or Email Credit Card Information —
m Enclosed is check # in the amount of $ . m Visa
m MasterCard
m Please charge Credit Card # in the amount of $
Name as it appears on the Card
Card Security Code
Billing Address
m AmEx
Exp. Date / Thank you for your interest in joining the Illinois Association of Defense Trial Counsel. Your application will be presented to the Board of
Directors for approval at their next regular meeting. Until that time, if you have any questions, please contact the IDC office at:
Illinois Association of Defense Trial Counsel
PO Box 588 • Rochester, IL 62563-0588 • 800-232-0169 • 217-498-2649 • www.iadtc.org
80 | IDC QUARTERLY | Fourth Quarter 2013
57
What is the IDC?
We are the premier association of attorneys in
Illinois representing business, corporate, professionals, and other individual defendants in civil
litigation. The IDC is an exceptional community of
defense attorneys dedicated to improving the
judicial system and the practice of law.
The IDC is a reasoned and independent voice
for fairness in the legal system. We work with the
business, insurance, and medical communities to
ensure a fair and equal justice system for all litigants.
The IDC is
n An advocate for the legal profession
n 1,000 members strong
n Looked to for advice and support by the
judiciary
n A resource for legislators
How is the IDC Making a
Difference?
The IDC strengthens the practice of law and
improves the skills of lawyers that defend individuals
and businesses in Illinois. We enhance the knowledge of defense attorneys through our nationally
respected publication the IDC Quarterly and the new
Survey of Law, by our continuing legal education
programs, and committees that focus on specialty
practice areas like Civil Practice; Commercial
Law; Employment Law; Local Government Law;
and Tort Law.
The IDC is working to protect the Illinois legal system, demanding a level playing field and resisting
attempts to dismantle the jury system. The IDC is
a respected resource providing:
n Fact sheets on the impact of pending litigation
n Expertise to legislative committees and
political leaders
n Amicus briefs on legal issues pending before the
Illinois reviewing courts
IDC members are as diverse as
the clients we represent
From big firms and small and all corners of the state,
attorneys join the IDC based on our common issues
and a common desire to improve our legal system.
Over the past five decades, we have grown from an
organization of mostly insurance defense attorneys
to a broad-based association of litigators who
represent an entire range of business and industry
throughout Illinois and the United States. The
diversity of our membership and clientele informs
our independent and balanced view of Illinois’s
judicial system and the litigation that affects it.
What are Our Core Values?
n To promote and support a fair, unbiased, and
independent judiciary
n To take positions on issues of significance to
our membership, and to advocate and publicize
those positions
n To promote and support the fair, expeditious, and
equitable resolution of disputes, including the
preservation and improvement of the jury system
n To provide programs and opportunities for
professional development to assist members in
better serving their clients
n To increase its role as the voice of the defense
bar of Illinois, and to make the IDC more relevant
to its members and the general public
n To support diversity within our organization, the
defense bar, and the legal profession
Presorted
Standard
U.S. Postage
PAID
Permit No. 650
Springfield, IL
Illinois Association
of Defense Trial Counsel
P.O. Box 588
Rochester, IL 62563-0588
ILLINOIS ASSOCIATION OF DEFENSE TRIAL COUNSEL
LAW • EQUITY • JUSTICE
CALENDAR
of Events
l August 28
Executive Committee & Board Meeting • Pretzel & Stouffer, Chartered • Chicago
l September 17
IDC After Hours • Porter’s Steakhouse • Collinsville
l September 18
Deposition Academy • Doubletree by Hilton • Collinsville
l September 25
Executive Committee & Board Meeting • Johnson & Bell, Ltd. • Chicago
l October 7 – 11
DRI Annual Meeting • Marriott Wardman Park • Washington, D.C.
l October 23
Deposition Academy • NIU Conference Center • Naperville
l November 6
Executive Committee & Board Meeting • SmithAmundsen LLC • Chicago
l December 10
Executive Committee Meeting • HeplerBroom LLC • Chicago
l December 10
Holiday Party • Lloyd’s Restaurant • Chicago
l December 11
Board of Directors Meeting • Heyl, Royster, Voelker & Allen, P.C. • Chicago

ThE IllINOIS ASSOCIATION OF DEFENSE TRIAl COUNSEl Third

Transcription

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