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Guerrero v. Sebastian Contracting Corp.

Case Date: 03/27/2001
Court: 1st District Appellate
Docket No: 1-99-3738 Rel

SECOND DIVISION
March 27, 2001         

 

No. 1-99-3738


IRMA GUERRERO, individually and
Special Administrator of the
estate of Reynaldo Guerrero,

               Plaintiff,

          v.

SEBASTIAN CONTRACTING
CORPORATION,

               Defendant,

and

MARK MACKEY, JEFFREY SILVER, and
MICHAEL GREEN,

               Defendants/Third Party
               Plaintiffs-Appellees,

          v.

L.B. HALL ENTERPRISES, INC.,

               Third Party Defendant/
               Appellant.

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)		 Appeal from the
Circuit Court of
Cook County.







The Honorable
Walter J. Kowalski,
Judge Presiding.


JUSTICE GORDON delivered the opinion of the court:

Third party defendant L.B. Hall Enterprises, Inc. (Hall), appeals from anorder of the Cook County circuit court entering judgment from a jury verdict infavor of third party plaintiffs Mark Mackey, M.D.; Michael Green, M.D.; andJeffrey Silver, M.D. on their third party complaint for contribution againstHall. In addition, Hall appeals from the denial of its motions for directedverdict, for judgment notwithstanding the verdict, and for reconsideration. Inthe underlying action, plaintiff Irma Guerrero sued Sebastian Contracting(Sebastian) and Drs. Mackey,

Green, and Silver (the defendant physicians) for damages arising from theinjury and death of her husband, Reynaldo Guerrero, in a work-related accident.The defendant physicians subsequently filed a third party complaint forcontribution against Hall, Reynaldo's employer. Plaintiff settled with defendantSebastian for $500,000, and with the defendant physicians for $1.2 million.Prior to these settlements, Hall independently settled with plaintiff IrmaGuerrero as to her claims against Hall under the Illinois Workers' CompensationAct (820 ILCS 305/1 et seq. (West 1993)). The trial on third partyplaintiffs' contribution complaint was held in September 1999.

Following the entry of judgment in favor of third party plaintiffs in thecontribution action, Hall appealed to this court, arguing, inter alia,that third party plaintiffs' settlement with plaintiff Irma Guerrero failed tocomply with section 2(e) of the Joint Tortfeasor Contribution Act (740 ILCS100/0.01 et seq. (West 1993)) and that third party plaintiffs thus had noright to pursue a contribution action against Hall. For the reasons set forthbelow, we reverse the trial court's judgment in favor of third party plaintiffsas to their contribution claim, as well as the court's denials of Hall's motionsfor directed verdict, for judgment notwithstanding the verdict, and forreconsideration.

BACKGROUND

Plaintiff Irma Guerrero initially sued Sebastian alleging negligence andStructural Work Act violations in the injury and death of her husband, Reynaldo.The complaint was subsequently amended to include as defendants five physiciansat the University of Illinois Hospital:  Mark Mackey, Joseph Vitello,Michael Green, Jeffrey Silver, and Sushil Sabnis.

According to plaintiff's third amended complaint, defendant Sebastian, thegeneral contractor for a project on West North Avenue in Chicago, subcontractedwith third party defendant Hall for the installation of fireproofing materialsat various locations in the building. On January 2, 1995, plaintiff's decedent,Reynaldo Guerrero, who was employed by Hall, was working on a rolling scaffoldwhen the platform gave way, causing him to fall to the ground below. Hesustained multiple internal and external injuries which resulted in his death onJanuary 2, 1995. According to plaintiff, Sebastian's negligence and StructuralWork Act violations were a proximate cause of the fall. Plaintiff also allegedmedical malpractice against the defendant physicians, claiming that theirfailure to diagnose Reynaldo's life-threatening injury resulted in his death.

The defendant physicians subsequently filed a third party complaint forcontribution against Hall, Reynaldo's employer, seeking contribution from Hallin the event that judgment was entered against the defendant physicians. Two ofthe defendant physicians, Joseph Vitello and Sushil Sabnis, were latervoluntarily dismissed by plaintiff.

In mid-1999, plaintiff reached a settlement agreement with defendantSebastian for $500,000 in consideration of a full release of claims. In hermotion to approve this settlement, plaintiff noted that Hall had refused towaive its workers' compensation lien. Attached to plaintiff's motion was a copyof the earlier settlement of her workers' compensation claim against Hall. Underthis settlement with the employer, which was approved in November 1995 by theIllinois Industrial Commission, Hall agreed to pay plaintiff $119,531.54"in full settlement of any and all claims for compensation and otherbenefits on account of the alleged accident and subsequent death of saiddecedent on January 2, 1995." Under the terms of this agreement, plaintiffreleased Hall "from any and all claims under the Workers' Compensation Actof Illinois on account of said alleged accident and subsequent death of saiddecedent." As part of its order approving the Sebastian settlement, thetrial court ordered plaintiff to satisfy Hall's workers' compensation lien fromthe Sebastian settlement proceeds.

In September 1999 the remaining defendant physicians, Mark Mackey, MichaelGreen, and Jeffrey Silver, settled with plaintiff for a total of $1.2 million.This "Settlement Agreement and Release" was entered into betweenplaintiff Irma Guerrero and "the Board of Trustees of the University ofIllinois (the "University") on behalf of its trustees, officers,agents, employees, administrators, staff, affiliates and subsidiaries, includingMark Mackey, M.D., Michael Green, M.D., and Jeffery [sic] Silver, M.D. (the"Defendants")." It applied to "claims arising out of anymedical care and treatment rendered to Reynaldo Guerrero during January of 1995at University of Illinois Hospital." The agreement stated that inconsideration of the agreed-upon payments, plaintiff:

"hereby completely releases and forever discharges Defendants and University from any and all past, present or future claims, demands, obligations, actions, causes of action, wrongful death claims, rights, damages, costs, losses of services, expenses and compensation of any nature whatsoever, where based on tort, contract, or other theory of recovery, which the Claimant now has, or which may hereafter accrue or otherwise be acquired, on account of, or may in any way grow out of the incident described in Recital A above, including, without limitation, any and all known or unknown claims for bodily and personal injuries to Claimant or any wrongful death claim of Reynaldo Guerrero's representative or heirs, which have resulted or may result from the alleged acts or omissions of the Defendants."

Hall is not named in the agreement as a released party.

As part of the foregoing settlement, which was approved by the trial court onSeptember 8, 1999, the defendant physicians assigned their cause of action forcontribution against Hall to plaintiff. In view of this assignment, plaintiffobtained leave to file an amended third party complaint showing her as theassignee of the defendant physicians "with full authority to prosecute thisthird party action."

A jury trial on the third party complaint for contribution began on September21, 1999. On September 28, the jury returned a verdict apportioningresponsibility in the case as follows: 45 percent to Hall, 45 percent to thedefendant physicians, and 10 percent to Sebastian. The trial court enteredjudgment on the verdict "apportioning fault to L.B. Hall Enterprises in theamount of 45% of the funds paid in settlement ($1,200,000.00)." The courtthen reduced this figure to "the amount of workers' compensation paid, i.e.,$123,829.63." The court also denied Hall's motions for directed verdict andfor judgment notwithstanding the verdict, as well as Hall's subsequent motionfor reconsideration.

The instant appeal followed.

DISCUSSION

Hall's main contention on appeal is that the third party plaintiff physicianshave no right of contribution against it in this case. Hall makes two argumentsin support of this contention. It argues first that the physicians' settlementwith plaintiff Irma Guerrero did not satisfy the requirements of section 2(e) ofthe Contribution Act, on the ground that under section 2(e) third partydefendant's liability must be extinguished by third party plaintiffs'settlement. Hall notes that it was not named in the agreement as a releasedparty, and thus argues that its liability was not extinguished by thissettlement.

In its second argument, Hall asserts that third party plaintiffs and Hall aresuccessive tortfeasors rather than joint tortfeasors, and that in suchcircumstances there is no independent right to bring a third party complaint forcontribution. According to Hall, the injury Reynaldo suffered in the accident isseparate and distinct from the harm which resulted from the defendantphysicians' negligent treatment of him. Hall thus contends that it is a priortortfeasor and that third party plaintiffs, as successive tortfeasors, arebarred from seeking contribution against it.

Finally, regardless of whether third party plaintiffs have a right ofcontribution, Hall argues that they failed to offer sufficient proof to supporttheir claim that Hall violated the Structural Work Act (740 ILCS 150/0.01 etseq. (West 1993)), and thus their third party complaint for contributionmust fail on this basis.

Because Hall's section 2(e) argument is dispositive of this case, we considerthis contention first. In that regard, we agree that Hall's liability was notextinguished by third party plaintiffs' settlement with plaintiff Irma Guerrero,and that this agreement thus did not meet the requirements of section 2(e).

Section 2(e) of the Contribution Act provides that:

"[a] tortfeasor who settles with a claimant pursuant to paragraph (c) is not entitled to recover contribution from another tortfeasor whose liability is not extinguished by the settlement." 740 ILCS 100/2(e) (West 1993).

 

The relevant portion of section 2(c) of the Contribution Act to which section2(e) refers provides:

"When a release or covenant not to sue or not to enforce judgment is given in good faith to one or more persons liable in tort arising out of the same injury or the same wrongful death, it does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms so provide ***." 740 ILCS 100/2(c) (West 1993).

Manifestly, under section 2(c) a release does not discharge a nonsettlingtortfeasor from liability unless the tortfeasor is specifically named in therelease. See Alsup v. Firestone Tire & Rubber Co., 101 Ill. 2d 196,201-02, 461 N.E.2d 361, 364 (1984); Stro-Wold Farms v. Finnell, 211 Ill.App. 3d 113, 116, 569 N.E.2d 1156, 1158 (1991). Hence, under the language ofsection 2(e) a settling tortfeasor may not recover contribution from anonsettling tortfeasor who was not specifically named in the settlement. See Stro-WoldFarms, 211 Ill. App. 3d at 118, 569 N.E.2d at 1159.

In the instant case, it is undisputed that Hall was not named as a releasedparty in plaintiff Irma Guerrero's settlement with the third party plaintiffphysicians. Hall's liability thus was not extinguished by this settlement.Moreover, Hall's liability was previously extinguished pursuant to its workers'compensation settlement, before any settlement was reached between the tortplaintiff and third party plaintiff physicians.

Accordingly, under the explicit terms of section 2(e), third party plaintiffsare not entitled to recover contribution from Hall. See Pearson Brothers Co.v. Allen, 131 Ill. App. 3d 699, 701-02, 476 N.E.2d 73, 74-75 (1985); Dixonv. Chicago & North Western Transportation Co., 151 Ill. 2d 108, 116, 601N.E.2d 704, 707 (1992).

Third party plaintiffs would urge that section 2(e) should be read moreliberally to apply even where third party defendant's liability was extinguishedindependently of third party plaintiffs' settlement with plaintiff IrmaGuerrero. According to third party plaintiffs, Hall's previous settlement withplaintiff as to her workers' compensation claims effectively eliminated Hall'stort liability to plaintiff. Hence Hall is no longer subject to paying twice,particularly in light of Hall's having successfully asserted its workers'compensation lien against plaintiff's settlement with Sebastian. Accordingly,third party plaintiffs contend, the purpose of section 2(e), which they assertis "to prevent a tortfeasor from paying twice towards the commonliability," has been met here, and any failure to name Hall specifically inthird party plaintiffs' release should not bar their action for contribution. Wedisagree.

The language of section 2(e) requiring that a nonsettling tortfeasor'sliability be "extinguished by the settlement" (740 ILCS 100/2(e) (West1993)) cannot be modified out of hand, and it has not been so modified inIllinois decisions. See Pearson Brothers, 131 Ill. App. 3d at 701-02, 476N.E.2d at 74-75; Dixon, 151 Ill. 2d at 116, 601 N.E.2d at 707.

In Pearson Brothers, a case relied upon by Hall, the underlying actionarose from the death of plaintiff's decedent in an accident involving a farmimplement. The plaintiff sued the manufacturer and the distributor of theimplement, and these two defendants brought third party contribution actionsagainst Stephen Allen, the implement's owner. Subsequently, the underlying casewas settled, pursuant to which the plaintiff released the defendant manufacturerand distributor. However, Stephen Allen was not specifically named in therelease. The trial court dismissed the contribution actions, reasoning thatsince the settlement document did not specifically name Allen, he was not aperson against whom the defendants could seek contribution under section 2(e).

The manufacturer argued on appeal that section 2(e) should be given anequitable rather than a literal interpretation. Consonantly, it pointed out thatduring the course of the litigation and prior to settlement, the statute oflimitations had run against the tort plaintiff and Allen was no longer at riskof double liability. Accordingly, the manufacturer urged that "if histortious conduct was a proximate cause of the death and injury, Stephen Allenshould be liable to pay fair contribution." The appellate court affirmedthe dismissal of the contribution claims, noting that it did not matter whetherthe statute of limitations had run, i.e., whether Stephen Allen'sliability were independently extinguished prior to the settlement. Allen was notspecifically named as a released party in the settlement document, and thus therequirements of section 2(e) were not met. Section 2(e), the court noted,"clearly states" that a settling tortfeasor may not recovercontribution "'from another tortfeasor whose liability is not extinguished bythe settlement.'" (Emphasis in original.) Pearson Brothers, 131Ill. App. 3d at 701, 476 N.E.2d at 74.

The Pearson Brothers court explained that section 2, which containssix separate provisions, "presents a comprehensive scheme," and thatgiving "each provision a loose interpretation which appears to meet theequity of the situation could well destroy the symmetry of the scheme." PearsonBrothers, 131 Ill. App. 3d at 701-02, 476 N.E.2d at 74-75. The court stated:"We do not choose to torture the language of section 2(e) to permit theseeking of contribution here even though it might seem fair to do so. Todisregard the limitation of section 2(e) each time it might seem fair to do sowould cause intolerable confusion." Pearson Brothers, 131 Ill. App.3d at 702, 476 N.E.2d at 75. See Stro-Wold Farms, 211 Ill. App. 3d at117-18, 569 N.E.2d at 1159 (reaffirming Pearson Brothers' interpretationof section 2(e), which the court termed a "'bright-line rule' *** that atortfeasor who settles a claim is not entitled to contribution from anothertortfeasor whose liability is not explicitly extinguished by name in thesettlement").

The Pearson Brothers interpretation of section 2(e) is cited favorablyin Dixon v. Chicago & North Western Transportation Co., 151 Ill. 2d108, 601 N.E.2d 704 (1992), an Illinois Supreme Court case which, though notcited by either of the parties, is squarely analogous to the instant case. Therethe factual situation is reversed. In Dixon it was the employer who suedthe manufacturer for contribution. The plaintiff in the underlying action wasinjured when, during the course of his employment, a motor vehicle in which hewas a passenger went out of control and flipped over. The plaintiff sued hisemployer, the Chicago and North Western Transportation Company (North Western),pursuant to the Federal Employers' Liability Act (45 U.S.C.