Claudy v. Commonwealth Edison Co.

• Decision Date: 14 September 1993
• Docket Number: No. 1-91-1171,1-91-1171
• Citation: 626 N.E.2d 1088,255 Ill.App.3d 714,193 Ill.Dec. 537
• Parties: , 193 Ill.Dec. 537 Barbara CLAUDY, Individually and as Administrator of the Estate of Keith Claudy, deceased, and Barbara Claudy, as Mother and Next Friend of Angela Claudy and Jennifer Claudy, minors, Plaintiffs-Appellants/Cross Appellees, v. COMMONWEALTH EDISON COMPANY, a corporation, and City of Sycamore, a municipal corporation, Defendants (Commonwealth Edison Company, a corporation, and City of Sycamore, a municipal corporation, Third-Party Plaintiffs, Larry Jones, Individually, and d/b/a AAA Tree Service, Third-Party Defendant-Appellee/Cross Appellant). First District, Second Division
• Court: United States Appellate Court of Illinois

Page 1088

626 N.E.2d 1088

255 Ill.App.3d 714, 193 Ill.Dec. 537

Barbara CLAUDY, Individually and as Administrator of the Estate of Keith Claudy, deceased, and Barbara Claudy, as Mother and Next Friend of Angela Claudy and Jennifer Claudy minors, Plaintiffs-Appellants/Cross Appellees, v. COMMONWEALTH EDISON COMPANY, a corporation, and City of Sycamore, a municipal corporation, Defendants (Commonwealth Edison Company, a corporation, and City of Sycamore, a municipal corporation, Third-Party Plaintiffs, Larry Jones Individually, and d/b/a AAA Tree Service, Third-Party Defendant-Appellee/Cross Appellant).

No. 1-91-1171.

Appellate Court of Illinois,

First District, Second Division.

Sept. 14, 1993.

Rehearing Denied Nov. 18, 1993.

Bernard R. Nevoral & Associates, Ltd., Chicago (Bernard R. Nevoral, David L. Cwik, Karen A. Keefer, of counsel), for plaintiff, appellant, cross-appellee.

Kiesler & Berman, Chicago (Alan P. Miller, R. Howard Jump, Patti M. Deuel, of counsel), for third-party defendant, appellee, cross-appellant.

Cassiday, Schade & Gloor, Chicago (Rudolf G. Schade, Timothy J. Ashe, Michael M. Tannen, of counsel), for amicus curiae IL Ass'n of Defense Trial Counsel.

Kiesler & Berman, Chicago (Alan P. Miller, R. Howard Jump, Jeffrey S. Pavlovich, of counsel), of counsel on brief of amicus curiae IL Ass'n of Defense Trial Counsel.

Cooney and Conway, Chicago (James T. Newman, of counsel), for amicus curiae IL Trial Lawyers Ass'n.

Bernard R. Nevoral & Associates, Ltd., Chicago (Bernard R. Nevoral, of counsel), of counsel on brief of amicus curiae IL Trial Lawyers Ass'n.

Justice SCARIANO delivered the opinion of the court:

Plaintiff Barbara Claudy brought a wrongful death action against defendants Commonwealth Edison Company (Edison) and the City of Sycamore (the City) in connection with the death of her husband, Keith Claudy, an employee of AAA Tree Service, who was electrocuted while engaged in removing a tree near Edison's power lines in Sycamore, Illinois. ¹ AAA Tree Service had been retained by the City to remove the tree. ²

The City filed a third-party complaint against decedent's employer, Larry Jones, individually and doing business as AAA Tree Service, which was later amended to include a claim for contribution. Claudy thereafter agreed to a settlement of her suit with the City, whereby she received $400,000 and an assignment of the City's third-party action for contribution against Jones. In return, Claudy released all of

"the RELEASEES and all other persons, entities or parties of and from any and all liability now accrued or hereinafter to accrue on account of any and all claims or causes of action which CLAUDY now has or may hereafter have arising from the death of Keith Claudy on or about July 24, 1979 or otherwise arising from the accident."

The settlement agreement identified the "RELEASEES" as

"The City of Sycamore, a municipal corporation, together with its officers, associates, agents, employees, attorneys, and insurers * * *."

The court approved the settlement and assignment after finding that they were made in good faith. One year later, Jones moved to dismiss the third-party action for contribution against him, arguing that pursuant to the terms of the Contribution Act, a tortfeasor who settles with a claimant is not entitled to recover contribution from another tortfeasor whose liability is not extinguished, and that in order to be discharged by a release, a tortfeasor must be specifically identified. Alsup v. Firestone Tire & Rubber Co. (1984), 101 Ill.2d 196, 77 Ill.Dec. 738, 461 N.E.2d 361.) Accordingly, Jones contended that since he was not specifically named in the release, the City had no right to contribution from him and therefore had nothing to assign. (Puckett v. Empire Stove Co. (1989), 183 Ill.App.3d 181, 132 Ill.Dec. 110, 539 N.E.2d 420.) Alternatively, assuming the release did in fact extinguish his liability, he argued that "the purported assignment [was] an attempt to contravene the Contribution Act, the Worker's Compensation Act, as well as, the Illinois Insurance Guaranty Fund Act."

The City responded that the court was without jurisdiction over the issue because Jones had waived any objections to the release and assignment by failing to raise them when the court considered whether the settlement was made in good faith. Moreover, the City argued, inasmuch as the release extinguished Claudy's claims against all "parties" and that Jones was a party, his liability was in fact terminated. Jones replied that he was not required to raise his defenses to the contribution action at the hearing on the bona fides of the settlement, claiming that his argument as to whether or not his liability was extinguished by the release went to the settlement agreement as it applied to him, and not to the agreement itself or the parties' right to contract as they deemed appropriate.

On December 10, 1990, the trial court held that Jones was not released by the settlement agreement, that the City had no right of contribution to assign to Claudy, and that therefore the assignment was a nullity. The court also rejected the City's argument that the court did not have jurisdiction. The court reasoned, "[i]t is not the 'good faith finding' that is at issue, but rather whether a cause of action exists. Clearly, the court has jurisdiction on this issue."

However, Claudy filed a timely motion to reconsider in which she maintained that the release discharged all "parties" to the litigation and that Larry Jones, individually and d/b/a AAA Tree Service, and Edison were the only other parties to the litigation. In addition, Claudy referred to the following provision in the original agreement:

"If after the date of this Agreement, any provision of this Agreement is held to be illegal, invalid or not enforceable under the present or future laws effective during the terms of this Agreement such provisions shall be fully severable and in lieu thereof a provision as similar in terms to such illegal, invalid or not enforceable provision, as may be possible, shall be added to this Agreement[ ]"

and pursuant to this provision, she indicated to the court that the original agreement had been amended after it had been invalidated by the court to provide as follows:

"CLAUDY hereby fully and forever discharges, releases, acquits and discharges [sic ] the RELEASEES, and further forever releases, acquits and discharges COMMONWEALTH EDISON, LARRY JONES, Individually and d/b/a AAA TREE SERVICE."

Jones responded that the amendment, by its own terms, did not apply; that it was invalid because it was amended ex parte; that it was void for lack of consideration; and that Claudy and the City were attempting to correct a mistake of law for which the law affords no remedy. Jones also renewed his previous arguments with respect to the original release.

On March 5, 1991, the court vacated its order of December 10, 1990, and entered one in which it determined that the ambiguity in the original release had been resolved by the amendment which specifically named Jones as a party intended to be discharged; and although it reaffirmed its finding of a good faith settlement, the court found, nevertheless, that the assignment violated "the public policy propounded by the legislature in the Contribution Act," which the court felt "was designed to apportion damages among tortfeasors based upon relative degree of culpability, not to increase the total damages available to plaintiff."

Claudy appeals from the court's order dated March 5, 1991, and Jones cross-appeals from the court's orders entered on December 10, 1990, and March 5, 1991. Claudy does not raise as an issue on appeal her argument, rejected by the trial court, that it had no jurisdiction to entertain Jones' objections to the release and assignment as being untimely.

Because the issues presented herein are immensely important public policy questions, we invited sua sponte the Illinois Association of Defense Trial Counsel and the Illinois Trial Lawyers Association to file briefs as amici and to participate in oral argument. (134 Ill.2d R. 345.) We are deeply appreciative of the assistance of both organizations and their counsel.

I.

It is well established that a cause of action for personal injuries is not assignable (North Chicago Street R.R. Co. v. Ackley (1897), 171 Ill. 100, 105, 49 N.E. 222, 225; Town & Country Bank of Springfield v. Country Mutual Insurance Co. (1984), 121 Ill.App.3d 216, 218, 76 Ill.Dec. 724, 725, 459 N.E.2d 639, 640); and the reasons usually given for the rule are that: "(1) [a] litigious person could harass and annoy others if allowed to purchase claims for pain and suffering and pursue the claims in court as assignees; and (2) all assignments are void unless the assignor has either actually or potentially the thing which he attempts to assign." Town & Country Bank, 121 Ill.App.3d at 218, 76 Ill.Dec. at 725, 459 N.E.2d at 640, citing Ackley, 171 Ill. at 111, 49 N.E. at 226.

Claudy argues that the contribution action has "none of the hallmarks of a claim for personal injuries," but rather, that it is "a claim for pecuniary loss" to the City which was damaged by paying more than its pro rata share of liability. According to Claudy, the contribution action is "predicated * * * upon the business dealings between the City of Sycamore and Larry Jones" and is therefore assignable as in Daugherty v. Blaase (1989), 191 Ill.App.3d 496, 138 Ill.Dec. 900, 548 N.E.2d 130, where the court upheld an insured's assignment to the insurer of a claim for his broker's malpractice based in part upon the business relationship between the broker and his client.

Jones maintains that the right of contribution is personal "in the sense that it relates only to the relationships and liability between joint tortfeasors." He contends that plaintiffs have no interest in the allocation of loss since they are entitled to collect against one or all of the...