General Liability Defense : Chicago General Liability Lawyer & Attorney : Mark McAndrew : Hennessy & Roach Law Firm : Civil Defense Litigation, Damages : Illinois, Wisconsin, Midwest

Al Wajnberg and Dayna L. Wunglueck were involved in a car accident in 2007.  Wajnberg's insurer, Erie Insurance Co.www.erieinsurance.com, paid $10,000 toward Wajnberg's medical expenses.  Erie then filed a subrogation claim against Wunglueck’s insurer, Farmers, seeking recovery of the $10,000 through arbitration reimbursement.   Erie sent Farmers a letter stating “[p]lease protect the interest of Erie insurance at the time of settlement with our insured.” 

During the subrogation claim, Wajnberg filed a personal injury claim against Wunglueck.  Wajnberg and Wunglueck ultimately settled their lawsuit for $40,000, which included Erie’s medical payment subrogation claim. Wajnberg and his attorney first became aware of Erie's lien during settlement negotiations after Famer’s provided a copy of Erie’s letter. After the settlement, Wajnberg filed a motion to adjudicate Erie's lien. The court ultimately reduced the $10,000 lien by one-third, pursuant to the “common fund doctrine.”  Erie appealed.

The appellate court affirmed. Wajnberg v. Wunglueck. 2011 IL App (2d) 110190 (Dec. 2011). The court explained that the prevailing party (in the personal injury case) bears the cost of attorney’s fees.  One exception to this rule is the equitable “common fund doctrine,” which protects attorneys who deal with nonparticipating insurance companies (Erie).  If an attorney performs legal services and a nonparticipating subrogee (Erie) benefits, a fund is created.  If Erie benefits then Erie should absorb its share of attorney's expenses (from the personal injury case).

The “common fund doctrine” does not apply if an insurer “promptly and unequivocally” advises the plaintiffs and /or their attorneys of its intention to pursue its own subrogation claim and disclaims any intention to employ the plaintiff’s attorney. This is called a Tenney letter. Tenney v. American Family Mut. Ins. Co., 128 Ill. App. 3d 121 (1984). Erie’s letter to Farmers may be reasonably interpreted as Erie’s desire to assert a lien for medical payments. Further, after Erie found out about the personal injury case, Erie could have sent a Tenney letter to Wajnberg or his attorney. Because Erie did not participate in the personal injury case or the fund, never sent a Tenney letter to Wajnberg or his attorney, and ultimately benefited from the settlement, the common fund doctrine applied and Erie’s lien was reduced. 

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In 2007, an Atlasjet Airlines plane crashed into a mountain located in Turkey.  Relatives of 32 victims filed a products liability suit in Cook county Circuit Court against the airplane’s manufactures, Boeing, McDonnell Douglas Corporation, and Honeywell International Incorporated. 30 of the 32 victims were Turkish residents. Defendants filed a motion to dismiss on grounds of forum non conveniens. They argued that Turkey would be more convenient or even Washington state where Honeywell is located.  The circuit court held that private and public interest factors did not  favor dismissal and two of the defendants were headquartered in Chicago. The evidence and witnesses were also scattered through the US. The crash site was less important because jurors do not need to see the site to resolve a products liability claim. The court also pointed out that the Turkish court may decline jurisdiction over the defendants, Turkish law does not provide for pre-trial discovery, and the Turkish law requires a claimant pay a court fee of 5.4% of the amount of the substantive claim.  The defendants appealed.

The 1st District Appellate Court agreed and affirmed. Yavuz Arik, etc. v. The Boeing Co., et al., 2011 IL App (1st) 100750-U. The court stated that all of the evidence related to design, manufacture and assembly of the aircraft and its warning system is in the U.S.  Product liability actions are not localized actions,  rather they have international implications. Americans just as Turks have an interest in the safety of Boeing airplanes.   Furthermore, investigation of the crash took place in the United States and Germany but not Turkey. As the evidence is scattered throughout different states and countries, no one forum is more convenient then the other. 

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United Automobile Insurance Company (United)www.unitedautoinsurance.com insured Rodney Buckley whose car collided with Hal Haywood’s car. Haywood filed a personal injury suit. After Buckley did not appear at an arbitration hearing, an award was entered in Haywood’s favor. The decision stated that Buckley “did not participate in good faith.” United filed a notice to reject the award arguing that Buckley’s failure to appear was inadvertent. Ultimately, Buckley was barred from rejecting the arbitration award against him for failure to appear at the arbitration hearing.

To collect his judgment, Haywood brought garnishment proceedings against United. United filed a declaratory judgment arguing that Buckley was not covered under the policy because he breached the assistance and cooperation policy provision by failing to appear at the arbitration hearing.  Haywood then counter-argued that Buckley’s failure to appear was inadvertent and that Buckley cooperated. The court found that Buckley had not breached his contractual duty to cooperate. United appealed.The appellate court affirmed.  United Automobile Insurance Company v. Buckley, et al. 2011 IL App (1st) 103666.  To show breach of a cooperation clause, the general rule is that the insurer must show that it exercised a reasonable degree of diligence in seeking the insured’s participation. The insurer will not be relieved unless it proves its defense was substantially prejudiced by the insured actions or conduct. 

The Appellate Court looked at the record which showed that Buckley participated in the court proceedings, assisted in the discovery process, and regularly commnunicated with counsel. And thus the trial court's decision that Mr. Buckley did not wilfully refuse to cooperate was not against the weight of the evidence.  More so, United was not substantially prejudiced because Buckley’s absence did not prevent United from challenging damages evidence or from cross-examining Haywood.  

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The plaintiff,  Paul Swearingen, was a truck driver, who delivered a tanker full of chemicals to the defendant, Momentive Specialty Chemicals ww2.momentive.com/home.aspx.  Swearingen parked in the unloading bay, and Momentive asked him to open the dome lid on the top of his truck.  No one from Momentive was present to provide instructions to Swearingen.  Swearingen admitted that his employer had trained him to retain three points of contact on the truck when opening the lid.  He was aware that he was not wearing a safety harness, and  that there was a low, exposed fire suppression system pipe.  Nevertheless, Swearingen climbed on top of the truck stood up, hit is head on the pipe, fell and was injured.      

Swearingen’s complaint alleged  that Momentive breached its duty by failing to warn him of the risk associated with the pipe and by failing to provide him with a fall protection harness.  Generally, a landowner owes a business invitee “the duty of exercising ordinary and reasonable care to see that the premises are reasonably safe.”  Momentive’s motion for summary judgment was granted after it had argued that the hazard was “open and obvious” and that Momentive had no duty to Swearingen. 

On appeal, Swearingen argued in response to the “open and obvious” condition that the “deliberate encounter exception” should have been applied.  The 7^th Circuit disagreed and affirmed the district court decision.  Swearingen v. Momentive Specialty Chemicals Inc., No. 11-2088  (Dec. 7, 2011).  "Under that exception, even if an invitee harms himself on an open and obvious hazard, the landowner may still be liable if he had reason to expect that the invitee would deliberately encounter the hazard because the advantages of doing so outweigh the apparent risk to a reasonable person."  The court explained, here, Swearingen had been trained by his employer in the correct way to open the lid; however, he did not open it correctly.  Overall, there was no evidence that Momentive had reason to expect that Swearingen would have climbed up to deliberately encounter the pipe in such a way.  The court concluded, under Illinois law, that Momentive did not have a duty because the injury was neither foreseeable nor likely, and the burden on the defendant to guard against the injury would be substantial. 

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Passengers in a minivan were injured in a two-car collision. The passengers sued both drivers of the vehicles. The jury found no negligence on the part of both drivers. The judge granted the passengers’ motion for retrial concluding “the jury’s finding…is unreasonable and against the manifest weight of evidence…” The defendants appealed the order for retrial.   The Appellate Court, 1^st District reversed because “the jury could have found that the passengers failed to prove by a preponderance of the evidence that the drivers were negligent.” The verdicts were also not legally inconsistent or against the manifest weight of evidence.   Anderson v.Anderson, 2011 IL App (1st) 110034 (Sep. 30, 2011).

The court stated since this case involved plaintiffs suing multiple potential tortfeasers, the burdens of proof between innocent, injured parties must be discussed. This raises the “doctrine of alternative liability,” which the Illinois Supreme Court has adopted. Smith v. Eli Lilly & Co., 137 lll.2d 222 (1990).   Alternative liability may apply when two or more defendants act tortiously toward a plaintiff who, through no fault of her own, cannot identify which one of the joint defendants cause the injury. The burden of proof then shifts to each defendant to prove his innocence with respect to causation. However, the innocent plaintiff still must prove that each tortfeasor was negligent before the burden will shift. Wyscocki v. Reed, 222 Ill. App. 3d 268 (1991). 

Here, because the jury did not find negligence on the part of the drivers and because the jury could have found that that the plaintiffs failed to prove the negligence of both defendants, the use of the doctrine of alternative liability was unavailable.  

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Walsh Construction was the general contractor for an Illinois water reclamation district construction project. Luise, Inc. was a subcontractor of Walsh. Walsh requested coverage as an additional insured under Luise’s liability insurance policy, which was purchased from Scottsdale Insurance Company.   The language for the additional insured provision excluded coverage for accidents “arising out of the sole negligence of the additional insured.” A Walsh employee backed a bulldozer into Luise’s dump truck. The employee driving the truck sued Walsh and the water district but later dropped the water district from its claim. Scottsdale sued for declaratory judgment in federal district court arguing that there was no duty to defend Walsh because of the sole negligence exclusion. Subsequently, Walsh filed a third party complaint for contribution against Luise. The district court granted summary judgment against Walsh, concluding that Scottsdale was not obligated to defend Walsh.  Scottsdale Ins. Co. v. Walsh Const. Co., No. 10 C 1565 (Sept. 29, 2011). 

Walsh argued that the sole negligence exclusion did not apply because both drivers may have been negligent. Walsh further argued that the employee’s complaint initially included the water district as well. The court stated there is no case law to substantiate an inference that Walsh is not solely negligent just because the water district at one time was named as a defendant.  the court further explained that Walsh’s theories cannot be supported by the employee’s complaint if the complaint does not allege any supporting facts and would cause the court to speculate regarding certain facts as to how the accident occurred. A court will not read into the complaint facts that are not there.   Here, the facts alleged in the complaint were outside the bounds of the policy coverage. 

Walsh also relied on their third-party complaint and testimonial evidence, and argued under Pekin Insurance Company v. Wilson that the Illinois Supreme Court considered a third-party complaint where the insurance policy contained an exception to coverage exclusion provision.  237 Ill.2d 446 (2010).  Here, however, there was no such exception. The district court further went on to say that in L.J. Dodd Construction Company v. Federated Mutual Insurance the court held that a trial court may not look to a third-party complaint absent some unusual or compelling circumstance. Similarly, in National Fire Insurance v. Walsh Construction Company, the court applied the same rule in finding that the facts alleged in the complaint fell squarely into the sole negligence exclusion. 392 Ill. App. 3d 312 (Ill. App. Ct., 1st Dist. 2009) (citing American Economy Ins. Co., v. DePaul University, 383 Ill. App. 3d 172 (2008)) (declining to allow an additional insured to bolster its claim of coverage by referencing its own third-party claim). Here too, Walsh’s testimonial evidence is not entitled to an exception and the complaint is sufficient to find Scottsdale had no duty to defend. 

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While crossing a Chicago street, Beverly Longo strayed outside the crosswalk and was hit by a Chicago Transit Authority (CTA) bus. She claimed that she could not cross within the crosswalk because there were other pedestrians and a bicyclist who was making deliveries for a local sandwich shop. She claimed the bike was also in the crosswalk. Longo filed suit against the CTA.  

During summary judgment proceedings, the court concluded that there was no evidence of negligence. Summary judgment was granted in favor of the CTA. Longo appealed.

The appellate court affirmed but on grounds that there was a lack of duty owed to Longo. Amanda Jimolka v. Chicago Transit Authority, et al., No. 1-10-2894 (2011). Under Illinois Law, pedestrians traveling on a public roadway, outside of the crosswalk are neither intended or permitted users and  thus are owed no duty of care. Streets are used for vehicles not pedestrians.    It was undisputed that Longo collided with the lower, right hand corner of the bus near a manhole that was more than 9 feet outside of the crosswalk.   Under Illinois law, it was Longo who should have yielded to the traffic when she walked outside of the crosswalk. 

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Plaintiff, Andre Johnson, voluntarily enrolled as a beneficiary in defendant, Salvation Army’s, adult rehabilitation program. The treatment program included assigned job responsibilities. During the program, Johnson was injured in a car crash while a passenger in a Salvation Army owned vehicle being driven by a Salvation Army employee. Johnson filed a negligence claim. The Salvation Army filed an affirmative defense alleging that Johnson’s claims were barred because he signed an exculpatory agreement. Ultimately, the circuit court decided that the exculpatory clause in the beneficiary’s admittance statement was a complete bar to Johnson’s claims.  

The appellate court agreed. Johnson v. Salvation Army, 2011 IL App (1^st) 103323.  Johnson argued that the exculpatory clause was against public policy in that his relationship with the defendant was akin to an employee/employer.  While exculpatory agreements are generally contrary to public policy if between an employer and employee, the court disagreed with Johnson and concluded that the relationship was that of a beneficiary and charitable organization. The work therapy and training during rehabilitation was part of the rehabilitation process and gave the beneficiaries a sense of self worth. The beneficiaries were not paid for their work. The admittance statement Johnson signed even stated that “I am a beneficiary and not an employee of this center.” 

Johnson also argued that the disparity in bargaining power between him and defendant rendered the exculpatory clause unenforceable.  He argued that he had no free choice or reasonable alternative in bargaining with the defendant over the enrollment conditions and that he had no free choice but to accept the terms or be denied food and shelter. However, the court held that the food and shelter offered by the defendant were merely incident to the rehab program and that the defendant could have sought rehabilitation services elsewhere

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On November 8, 2004, plaintiff, Donald Van Gelderen, was at defendant, David Hokin’s home, installing automated window coverings.  As Van Gelderen was leaving the house, he fell down a flight of stairs inches away from the front door, and was injured.   A jury found the stairs were an unreasonably dangerous condition.  The jury found that Van Gelderen was 50% contributorily negligent, reducing the final award to about 1.5 million. Defendant filed a motion for judgment notwithstanding the verdict.  The motion was denied, and the defendant appealed. 

 The appellate court affirmed.  Van Gelderen v. Hokin, 2011 IL App (1st) 093152.  The court distinguished the case of Alcorn v. Stepzinski.  185 Ill. App. 3d 1 (1989).  The court in Alcorn held that while all stairs present some risk of harm, the risk of harm must be shown to be unreasonable to give rise to a duty of care.  The configuration of a stairway may be dangerous only if the stairway configuration masks or obscures the stairs in a way which prevents the invitee from becoming aware of the open and obvious configuration.  The appellate court, here, concluded that the Alcorn court’s decision heavily relied on the plaintiff’s failure to present expert testimony. 

 Hokin argued that there was no evidence that the stairwell was improperly designed, masked, or obscured.  However, the court said the Van Gelderen did present expert testimony that the stairwell was unreasonably dangerous.  The court held that this evidence was sufficient to support the jury findings.  The defendant also argued that the stairwell was an open and obvious condition. However, the appellate court concluded that the evidence fell short of establishing the condition was open and obvious as a matter of law. 

 A condition presents an open and obvious danger to the extent the risk is apparent to, and is appreciated by a reasonable person in the person’s exercise of ordinary perception, intelligence and judgment.  Plaintiff’s testimony that he did not see the condition presented a question of fact, precluding the court from finding an open and obvious condition.

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