Barnai v. Wal-Mart Stores, Inc.

• Court: Appellate Court of Illinois
• Writing for the Court: JUSTICE DELORT delivered the judgment of the court, with opinion.
• Citation: Barnai v. Wal-Mart Stores, Inc., 2017 IL App (1st) 171940, 93 N.E.3d 534 (Ill. App. 2017)
• Decision Date: 08 December 2017
• Docket Number: No. 1–17–1940,1–17–1940
• Parties: Frank BARNAI, Plaintiff, v. WAL–MART STORES, INC., International Contractors, Inc., and Nuline Technologies, Inc., Defendants, (Frank Barnai, as Assignee of the Contribution Claims of Wal–Mart Stores, Inc., International Contractors, Inc., and Nuline Technologies, Inc., Third–Party Plaintiff–Appellee; Summit Fire Protection Company, Third–Party Defendant–Appellant).

2017 IL App (1st) 171940

93 N.E.3d 534

Frank BARNAI, Plaintiff,

v.WAL–MART STORES, INC., International Contractors, Inc., and Nuline Technologies, Inc., Defendants,

(Frank Barnai, as Assignee of the Contribution Claims of Wal–Mart Stores, Inc., International Contractors, Inc., and Nuline Technologies, Inc., Third–Party Plaintiff–Appellee; Summit Fire Protection Company, Third–Party Defendant–Appellant).

No. 1–17–1940

Appellate Court of Illinois, First District, SIXTH DIVISION.

December 8, 2017

Sanchez, Daniels & Hoffman, LLP, of Chicago (John J. Piegore, Brian H. Sanchez, and John S. Huntley, of counsel), for appellant.

Healy Scanlon, of Chicago (Martin Healy, Jr., Kevin T. Veugeler, and Patrick C. Anderson, of counsel), for appellee.

Greenberg Trauig, LLP, of Chicago (Gregory E. Ostfeld, Abigail A. Clapp, and Michael R. Cedillos, of counsel), for appellee Wal-Mart Stores, Inc.

Belgrade and O'Donnell, P.C., of Chicago ( Steven B. Belgrade, John A. O'Donnell, and George M. Velcich, of counsel), for other appellee.

JUSTICE DELORT delivered the judgment of the court, with opinion.

¶ 1 Plaintiff Frank Barnai sued Wal–Mart Stores, Inc. (Wal–Mart), International Contractors, Inc. (ICI), and Nuline Technologies, Inc. (Nuline), after he was injured while working at a Wal–Mart store construction site. Wal–Mart, ICI, and Nuline, in turn, filed contribution claims against Barnai's employer, Summit Fire Protection Company (Summit), which they then assigned to Barnai as part of a global settlement agreement. Barnai then dismissed Nuline's contribution claim, and the case proceeded to trial on Wal–Mart's and ICI's contribution claims against Summit. The jury was given a verdict form that asked it to apportion fault only to Summit, Wal–Mart, and ICI. The jury returned a verdict, finding Summit 52% liable for Barnai's injuries, and the circuit court entered judgment on that verdict. Summit appealed. We reverse in part, vacate in part, and remand with instructions.

¶ 2 BACKGROUND

¶ 3 On October 16, 2007, plaintiff Frank Barnai was injured while working for Summit at a Wal–Mart store construction site. Barnai then sued Wal–Mart, the property owner; ICI, the general contractor; and Nuline, the electrical subcontractor. Those defendants answered Barnai's complaint and filed contribution claims against Summit.

¶ 4 During the course of the litigation, the court struck Wal–Mart's and Nuline's answers to Barnai's complaint and deemed as admitted Barnai's allegations against those defendants. Barnai eventually settled with Wal–Mart, ICI, and Nuline for $5,073,463.71. Summit did not contribute to the settlement.

¶ 5 Barnai then filed a motion for good faith finding. The motion recited that Barnai had agreed to settle his claims against Wal–Mart, ICI, and Nuline in exchange for $5,073,463.71 and an assignment of those defendants' contribution claims against Summit. The motion did not contain a copy of the settlement agreement, nor indicate how the settlement proceeds were to be allocated among the settling defendants. Despite those omissions, and over Summit's objection, the court entered a good faith finding.

¶ 6 The case later proceeded to trial. During the jury instruction conference, Barnai submitted a proposed verdict form labeled "IPI 600.16." The verdict form stated:

"We, the jury, apportion responsibility as follows:

Wal-Mart                           ___%
                International Contractors          ___%
                Summit Fire Protection Company     ___%
                                     TOTAL:       100%"
                

Summit submitted its own proposed verdict form, which was identical to Barnai's proposed verdict form, except it also contained the following sentence: "(Instruction to the Jury: If you find that any person was not legally responsible in a way that proximately caused the injured person's injury, then you should enter a zero (0)% as to that person or entity.) ." The court rejected Summit's verdict form and tendered Barnai's proposed verdict form to the jury.

¶ 7 After trial, the jury returned a verdict apportioning fault for Barnai's injuries as follows: Summit 52%, ICI 38%, and Wal–Mart 10%. The same day, the court entered judgment on the jury's verdict. Barnai then moved to convert the contribution verdict to a money judgment. Summit objected, arguing that (1) Wal–Mart and ICI did not pay more than their pro rata shares of the common liability and (2) any judgment against it should be reduced by $773,463.71, the amount its commercial general liability insurer, Interstate Insurance Company, contributed to the settlement fund.

¶ 8 Summit also filed a posttrial motion in which it argued that it was entitled to judgment notwithstanding the verdict because, among other things, the settlement agreement was not in good faith and Wal–Mart and ICI did not pay more than their pro rata shares of the common liability. The court ultimately granted Barnai's motion to convert the verdict to a money judgment, denied Summit's posttrial motion, and entered judgment in favor of Barnai and against Summit for $2,144,201.43, which represented 52% of the $5,073,463.71 settlement less $950,000—the amount Nuline contributed to the settlement.

¶ 9 On April 27, 2017, this court heard oral argument on Summit's appeal. This court ordered the parties to file supplemental briefs "addressing whether it was necessary for the jury to assess the responsibility of Nuline in order to calculate Wal–Mart's, ICI's, and Summit's pro rata shares of the common liability for purposes of resolving the third party claims for contribution pending against Summit." The parties filed supplemental briefs as requested, but on further consideration, this court determined that it lacked jurisdiction and entered an order dismissing Summit's appeal. See Barnai v. Wal–Mart Stores, Inc. , No. 1–15–2773 (June 23, 2017) (summary order under Supreme Court Rule 23(c) ). This court suggested to the circuit court that it could cure the jurisdictional defect by entering an order pursuant to Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016) finding that no just reason existed to delay appeal of the August 31, 2015, order denying Summit's posttrial motion.

¶ 10 Summit returned to the circuit court and filed a "Motion for Rule 304(a) Finding as to the August 31, 2015 Order." On July 26, 2017, the circuit court entered an order finding, pursuant to Rule 304(a), that there existed "no just reason to delay enforcement or appeal of the August 31, 2015 order." This appeal followed.¹

¶ 11 ANALYSIS

¶ 12 We begin by considering whether the circuit court erred by finding that the settlement was in good faith. Summit first argues that the court erred by finding the settlement in good faith because the settlement did not allocate any amount for Wal–Mart's and Nuline's sanctions liability. We disagree. The record on appeal shows that Barnai's lawsuit against Wal–Mart, ICI, and Nuline sounded in negligence. Moreover, although the court did impose sanctions on Wal–Mart and Nuline, those sanctions were procedural rather than monetary.

¶ 13 Next, Summit argues that the court erred because the settlement did not contain an allocation for Barnai's comparative fault. Summit fails to cite any authority that the court must consider the plaintiff's comparative fault in determining whether a settlement was made in good faith. Accordingly, this argument is waived. Ill. S. Ct. R. 341(h)(7) (eff. Jan. 1, 2016).²

¶ 14 Waiver aside, the record shows that ICI raised comparative fault as an affirmative defense, and that defense was never stricken. Barnai's comparative fault was still at issue when the parties engaged in settlement negotiations, and it was therefore subsumed into the settlement agreement.

¶ 15 Last, Summit argues that the court erred by finding the settlement in good faith despite the absence of an allocation of fault among the settling defendants. We find this argument persuasive. In determining whether a settlement was in good faith, the circuit court must consider, among other things, " 'whether the amount paid by the settling tortfeasor was "within a reasonable range of the settlor's fair share [citations.]." ' " Wreglesworth v. Arctco, Inc. , 317 Ill. App. 3d 628, 634, 251 Ill.Dec. 363, 740 N.E.2d 444 (2000) (quoting In re Guardianship of Babb , 162 Ill. 2d 153, 161, 205 Ill.Dec. 78, 642 N.E.2d 1195 (1994) ). In the present case, the court was not presented with any information about how the settling defendants had allocated fault amongst themselves at the time it entered a good faith finding. As a result, the court could not possibly have assessed whether the settlement amounts were within a reasonable range of each settling defendant's fair share of the liability. Accordingly, we must vacate the circuit court's order entering a good faith finding and remand for a new good faith hearing based upon the sums paid by each of the defendants as set forth in the April 8, 2015, release and assignment executed by Barnai and the settling defendants.

¶ 16 We next consider the question which formed for the basis for this court's request for supplemental briefing: under the Joint Tortfeasor Contribution Act (Contribution Act) ( 740 ILCS 100/0.01 et seq. (West 2010)), was the jury required to apportion fault to Nuline to correctly determine the relative fault of Wal–Mart, ICI, and Summit. We find that it was.

¶ 17 Section 2(b) of the Contribution Act provides:

"The right of contribution exists only in favor of a tortfeasor who has paid more than his pro rata share of the common liability, and his total recovery is limited to the amount paid by him in excess of his pro rata share. No tortfeasor is liable to make contribution beyond his own pro rata share of the common liability." 740 ILCS 100/2(b) (West 2010).

This court has explained that "[t]he 'common liability' is 'that amount actually paid by the parties defendant to the injured party pursuant to a good-faith settlement in a reasonable amount in exchange for a full release.' " (Emphasis added.) Zellers v....