Carlson v. Rehab. Inst. of Chi.

Decision Date15 March 2016
Docket NumberNo. 1–14–3853.,1–14–3853.
Citation401 Ill.Dec. 768,50 N.E.3d 1250
Parties Herbert P. CARLSON, Plaintiff–Appellant, v. The REHABILITATION INSTITUTE OF CHICAGO, an Illinois Not–For Profit Corporation, and Superior Air Ground Ambulance Service, Inc., Defendants–Appellees.
CourtUnited States Appellate Court of Illinois

Randall F. Peters, of Chicago, for appellant.

Thomas R. Hill, Rosa M. Tumialán, and Jordan S. Huttenlocker, all of Dykema Gossett PLLC, of Chicago, for appellees.

OPINION

Justice HYMAN delivered the judgment of the court, with opinion.

¶ 1 A nonemergency wheelchair van taking plaintiff Herbert Carlson from one medical facility to another facility located a little over a mile away got involved in a minor accident (the van struck the rearview mirror on a CTA bus). Carlson remained in the van for two to three hours before substitute transportation arrived. Carlson sued the transport company for negligence and breach of contract and its parent corporation for breach of contract. Before trial, however, Carlson voluntarily dismissed the contract claims, and went to trial only against the transport company on the negligence claim. A jury found against Carlson.

¶ 2 A year later this suit arose when Carlson again sued the parent corporation of the transport company and also sued the medical facility from which he had been taken for breach of contract, propounding a third-party beneficiary theory of standing. Rejecting this argument, the trial court granted both defendants' motions to dismiss. Moreover, the trial court found the 2013 claim was barred by the doctrine of res judicata and collateral estoppel. We affirm. Carlson lacked standing to sue as he was not a party to the contract nor was he a third-party beneficiary of the contract between the medical facility and the transport company. Additionally, Carlson's claim arose from the same occurrence that served as the basis for the earlier negligence lawsuit against the transport service; therefore, res judicata operated to bar the claim against its parent company as a party in privity.

¶ 3 BACKGROUND

¶ 4 In 2000, defendants The Rehabilitation Institute of Chicago (RIC) and Superior Air Ground Ambulance Service, Inc., executed a “Transportation Service Agreement” providing for emergency and nonemergency transport of patients “to other facilities and locations.” If non-emergency transport was needed, the contract stated Superior's wholly owned subsidiary would provide “Medicar Service (Courtesy Van) transport services” for nonemergency routine transportation.

¶ 5 A Medi–Car wheelchair van transferring Carlson from RIC to Warren Barr Pavilion clipped the mirror of a CTA bus. Police were summoned but left after 15 minutes because there were no injuries or damages other than to the bus mirror. Medi–Car waited for an “accident relief” van to complete the trip, forcing Carlson to remain in the van for two to three hour under less than ideal circumstances.

¶ 6 Carlson sued Medi–Car, alleging it was negligent during the incident (case No. 08–L–2534). In 2010, Carlson amended his complaint to add Superior under a breach of contract theory, but in 2012 voluntarily dismissed Superior under section 2–1009 of the Code of Civil Procedure (Code). 735 ILCS 5/2–1009 (West 2008). A jury found Medi–Car was not negligent. (Judge Drella Savage presided over the trial).

¶ 7 In 2013, Carlson again sued Superior, alleging breach of contract based on his status as a third-party beneficiary (case No. 13–L–12010). In March 2014, Carlson amended his complaint to add RIC. Carlson alleged that Medi–Car was a wholly-owned subsidiary of Superior and asserted a breach of contract claim against RIC as well as Superior.

¶ 8 Additionally, Carlson sought sanctions against Superior's attorneys for “intentionally refusing” to disclose relevant information to his attorney and to the trial court, referring to an order entered in the earlier case against Medi–Car (case No. 08–L–2534). The referenced undisclosed information appears to be Judge Savage's ruling that Carlson was a third-party beneficiary. The record also contains Judge Savage's May 3, 2011 order denying Carlson's motion for leave to amend his amended complaint to add a prayer for relief seeking punitive damages.

¶ 9 On November 17, 2014, Judge Mitchell granted RIC's and Superior's motions to dismiss brought under section 2–619 of the Code. 735 ILCS 5/2–619 (West 2012). At the hearing on Carlson's motion to reconsider this order, Judge Mitchell remarked on the possibility that another judge had reached a different conclusion on the third-party beneficiary status, “To me, it doesn't really make a difference in mind [sic ]. It is just not a third-party beneficiary contract.”

¶ 10 ANALYSIS

¶ 11 The standard of review of motions to dismiss under either section 2–615 or section 2–619 is de novo. Neppl v. Murphy, 316 Ill.App.3d 581, 583, 249 Ill.Dec. 736, 736 N.E.2d 1174 (2000). Additionally, because we review the trial court's judgment, not its rationale, we may affirm for any reason supported by the record regardless of the basis cited by the trial court. D'Attomo v. Baumbeck, 2015 IL App (2d) 140865, ¶ 30, 394 Ill.Dec. 601, 36 N.E.3d 892.

¶ 12 A motion to dismiss under section 2–619 motion admits the legal sufficiency of the complaint and raises defects, defenses, or other “affirmative matter” which appear on the face of the complaint or are established by external submissions which act to defeat the plaintiff's claim. Neppl, 316 Ill.App.3d at 584, 249 Ill.Dec. 736, 736 N.E.2d 1174. In ruling on the motion, the trial court must take all properly pleaded facts as true, and the complaint should not be dismissed unless it appears that no set of facts under the pleadings can be proved that would entitle the plaintiff to recover. Barba v. Village of Bensenville, 2015 IL App (2d) 140337, ¶ 19, 390 Ill.Dec. 917, 29 N.E.3d 1187. If a cause of action is dismissed under section 2–619 motion, the questions on appeal are whether a genuine issue of material fact exists and whether the defendant is entitled to a judgment as a matter of law. La Salle National Bank v. City Suites, Inc., 325 Ill.App.3d 780, 789, 259 Ill.Dec. 259, 758 N.E.2d 382 (2001).

¶ 13 To establish a breach of contract claim, a plaintiff must prove the existence of a valid and enforceable contract, performance by the plaintiff, breach of the contract by the defendant, and damages or injury to the plaintiff resulting from the breach. Sheth v. SAB Tool Supply Co., 2013 IL App (1st) 110156, ¶ 68, 371 Ill.Dec. 550, 990 N.E.2d 738. In third-party beneficiary contracts, a party (the promisor) promises to render a certain performance not to the other party (promisee), but ra ther to a third person (beneficiary). MBD Enterprises, Inc. v. American National Bank of Chicago, 275 Ill.App.3d 164, 168, 211 Ill.Dec. 678, 655 N.E.2d 1061 (1995).

¶ 14 Illinois recognizes two types of third-party beneficiaries, intended and incidental. Hacker v. Shelter Insurance Co., 388 Ill.App.3d 386, 394, 327 Ill.Dec. 433, 902 N.E.2d 188 (2009). An intended beneficiary is intended by the parties to the contract to directly benefit for the performance of the agreement; under the contract an intended beneficiary has rights and may sue. Id. An incidental beneficiary has no rights and may not sue to enforce them. Id. “Liability to a third-party must affirmatively appear from the contract's language and from the circumstances surrounding the parties at the time of its execution, and cannot be expanded or enlarged simply because the situation and circumstances justify or demand further or other liability.” Ball Corp. v. Bohlin Building Corp., 187 Ill.App.3d 175, 177, 134 Ill.Dec. 823, 543 N.E.2d 106 (1989). Moreover, while circumstances surrounding the execution of the contract may be considered, the alleged third-party beneficiary must be expressly named in the contract. Paukovitz v. Imperial Homes, Inc., 271 Ill.App.3d 1037, 1039, 208 Ill.Dec. 417, 649 N.E.2d 473 (1995) ; see also Estate of Willis II v. Kiferbaum Construction Corp., 357 Ill.App.3d 1002, 1008, 294 Ill.Dec. 224, 830 N.E.2d 636 (2005) (in Illinois presumption against construing contract in favor of third-party beneficiary status can only be overcome by “an implication so strong as to be practically an express declaration.” (citing Ball Corp., 187 Ill.App.3d at 177, 134 Ill.Dec. 823, 543 N.E.2d 106 )). Thus, [t]he operative question is whether the parties to the contract intended to confer a direct benefit on the purported third-party beneficiary.” (Emphasis omitted.) Bank of America National Ass'n v. Bassman FBT, L.L.C., 2012 IL App (2d) 110729, ¶ 27, 366 Ill.Dec. 936, 981 N.E.2d 1.

¶ 15 Without a third-party beneficiary status, “a litigant lacks standing to attack an assignment to which he or she is not a party.” Id. ¶ 15. Thus, a challenge to the plaintiff's third-party beneficiary status is a proper affirmative defense in a section 2–619 motion to dismiss.

¶ 16 The contract between RIC and Superior contains no language indicating that the parties intended to benefit either “patients” in general, or Carlson in particular. We agree with the trial court's statement that “the mere reference to a party in a contract will not confer third-party beneficiary status.” In our view, the contract as a whole expresses only the intent of RIC to provide for patient transport using the services of Superior Ambulance. In the absence of an express provision, we find that the contract between Superior and RIC did not intend to confer a direct benefit to the “patient” being transported, rather, the benefit was, as the trial court found, the “transportation of patients in exchange for payment.” Carlson was not an intended third-party beneficiary, and thus lacks standing to sue.

¶ 17 Finally, we reject Carlson's argument that a “ruling” by the judge in the earlier case on his status as third-party beneficiary to the contract between RIC and Superior binds a successor trial judge....

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