Guardianship of Babb, In re, 4-90-0425

CourtUnited States Appellate Court of Illinois
Citation597 N.E.2d 198,173 Ill.Dec. 490,232 Ill.App.3d 40
Docket NumberNo. 4-90-0425,4-90-0425
Parties, 173 Ill.Dec. 490 In re GUARDIANSHIP OF Clifford A. BABB (Glenn P. Babb, Guardian of the Person and Estate of Clifford A. Babb, Petitioner-Appellee), v. The City of CHAMPAIGN, Respondent-Appellee (Ed Roesch Equipment Company, Intervening Petitioner-Appellant; Reach All, et al., Intervenors-Appellants).
Decision Date29 June 1992

Page 198

597 N.E.2d 198
232 Ill.App.3d 40, 173 Ill.Dec. 490
In re GUARDIANSHIP OF Clifford A. BABB (Glenn P. Babb,
Guardian of the Person and Estate of Clifford A.
Babb, Petitioner-Appellee),
The City of CHAMPAIGN, Respondent-Appellee (Ed Roesch
Equipment Company, Intervening
Petitioner-Appellant; Reach All, et
al., Intervenors-Appellants).
No. 4-90-0425.
Appellate Court of Illinois,
Fourth District.
June 29, 1992.
Rehearing Denied Aug. 27, 1992.

[232 Ill.App.3d 42] James C. Kearns, Heyl, Royster, Voelker & Allen, Urbana, for intervening petitioner-appellant.

Richard F. Record, Jr., Mark R. Karpus, Craig & Craig, Mattoon, for intervenor-appellant Goforth Industries, Inc.

Richard R. Harden, Thomas, Mamer & Haughey, Champaign, for respondent-appellee City of Champaign.

Lord, Bissell & Brook, Chicago (R. Bruce Duffield, Hugh C. Griffin, Diane I. Jennings, Rebecca S. Kallas, of counsel), for intervenor-appellant Reach All.

Donald M. Tennant, Renee L. Monfort, Dobbins, Fraker, Tennant, Joy & Perlstein,

Page 199

[173 Ill.Dec. 491] Champaign, for intervenor-appellant Sweeney Industries, Inc.

John T. Coleman, Richard B. Foster, III, Baker & McKenzie, Chicago, for intervenor-appellant Ford Motor Co.

Ronald F. DeNardis, DeNardis, McCandless & Muller, P.C., Detroit, Mich., for intervenor-appellant Parker Fluid Connectors.

[232 Ill.App.3d 43] Justice KNECHT delivered the opinion of the court:

Ed Roesch Equipment Company (Roesch) appeals from an order of the Champaign County circuit court approving a settlement agreement between the estate of Clifford Babb and the City of Champaign (City) in this guardianship case and before any lawsuits were filed in relation to the injuries underlying the claim upon which the settlement agreement was based. On appeal, we have allowed Reach All, Goforth Industries, Inc. (Goforth), Ford Motor Company (Ford), Sweeney Industries (Sweeney), and Parker Fluid Connectors (Parker) to intervene as appellants. We affirm.

Clifford Babb, a city employee, sustained severe and permanent injuries on September 14, 1988, when he fell 20 to 40 feet, onto his head, from a cherry picker when the truck supporting the cherry picker caught fire. Clifford was then 33 years old. Medical records accompanying the guardianship petition indicate Clifford suffers severe cognitive deficits; his cognitive abilities are below the first percentile for American adults his age. His reading, writing, and mathematical skills are poor and he has difficulty with reasoning and memory. In short, the medical reports conclude Clifford will be unable to manage his own affairs for the rest of his life. The Champaign County circuit court appointed Glenn Babb, Clifford's father, as his guardian.

Glenn, as guardian of Clifford's estate, petitioned the court for approval of a partial settlement, with the City, of the "personal injury claim." The petition alleged there were meritorious primary liability claims available against the manufacturer, distributor, modifier, and component suppliers of the truck. Secondary liability could, according to the petition, be asserted against the City by the primary defendants in the contemplated action, exposing the City to substantial financial liability.

The petition also alleged an agreement wherein the City would be released from secondary liability in exchange for payment of $400,000 from the City's insurer to Clifford's estate. The workers' compensation claim was not settled and the parties agreed benefits would continue to Clifford. The attorney for the Babbs, Robert Auler, was to receive $133,333.33 of the $400,000 as the fee for legal representation in the "partial settlement." Further, Auler was to receive $35,000 to cover expenses incurred during litigation of primary liability.

The parties did not submit the agreement itself to the court; the petition contained only a description of the agreement. The court entered an order allowing Glenn's petition seeking approval of the settlement agreement, stating: "[T]he petition is allowed and the settlement[232 Ill.App.3d 44] of the potential claim or claims against the City of Champaign in the sum of 400,000 dollars is authorized and Attorney Robert Auler is directed to proceed with all steps necessary to secure the afore said settlement."

Glenn and the City filed a motion for a finding of good faith on the same day the court entered the above order. Attached to the motion was a copy of the settlement agreement and release. The settlement agreement itself provided, in pertinent part:

"1. The parties to this contract agree that CHAMPAIGN[, the City,] shall pay to BABB the amount of $400,000.00, of which amount $50,000.00 shall be without recourse. BABB shall repay to CHAMPAIGN, or its insurer, the amount of $350,000.00 from any recovery BABB may receive from any other party by settlement, verdict, judgment or otherwise, pertaining to the injuries and damages suffered by CLIFFORD BABB as aforesaid.

* * * * * *

Page 200

[173 Ill.Dec. 492] 3. The parties to this contract agree that BABB waives, releases and forever discharges, in favor of CHAMPAIGN, any rights BABB has to recover any attorney's fee and costs out of sums to be paid to CHAMPAIGN, or its insurer, as reimbursement or as a credit against future payments, for any payments CHAMPAIGN, or its insurer, has made pursuant to its obligation to CLIFFORD BABB under the Workers' Compensation Act. BABB further agrees to negotiate and consummate a contract with any attorneys retained subsequent to Robert I. Auler whereby a waiver, release and discharge of said attorney fee, plus costs, is incorporated as part of said retention of counsel. * * *

4. The parties to this contract agree that CHAMPAIGN, or its insurer, will continue to meet all legal obligations to CLIFFORD BABB pursuant to the Workers' Compensation Act despite any right CHAMPAIGN may have to suspend payments from said obligations by operation of law because of any recovery of any settlement, verdict or judgment, or any partial recovery of any settlement, verdict or judgment, by BABB against any other party for the injuries and damages suffered by CLIFFORD BABB as aforesaid, and CHAMPAIGN will continue to so refrain from suspending payments from its Workers' Compensation Act obligations until all settlements, verdicts or judgments against all parties against whom BABB makes a claim have been fully paid to BABB. At that time champaign,[232 Ill.App.3d 45] or its insurer, shall be entitled to suspend payments as permitted by law to the extent any sums received by BABB by settlement, verdict or judgment from other parties exceed the total amount BABB is obligated by this agreement to repay to CHAMPAIGN, or its insurer, at that time.

5. The parties to this contract agree that settlement will not be made by BABB against any third party without the written consent of CHAMPAIGN.

* * * * * *

9. The parties to this contract agree that it is conditioned upon entry of an Order by a Court of competent jurisdiction that this Settlement Agreement and the release contemplated in Paragraph 10 below, are made in good faith for purposes of Chapter 70, section 301, et seq., of the Illinois Revised Statutes, commonly known as the Contribution Act.

10. The parties to this contract agree that upon a finding of good faith as contemplated in Paragraph 9 above, BABB will execute a full and final release in favor of CHAMPAIGN and its insurer."

Roesch's brief indicates counsel for the City represented to the court, outside the record, that the then present cash value of past and future workers' compensation payments (the value of the City's lien) was estimated to be $2,400,000.

After receiving notice from Auler of a claim against Roesch for Clifford's injuries, Roesch, seller of the truck to the City in 1979, filed a petition seeking to intervene herein and object to Glenn's motion for a finding of good faith. Roesch's petition alleged that because the settlement was contingent on a finding of good faith, (1) the petition therefore sought an advisory opinion from the court, (2) the good-faith question was premature because not all necessary parties had been made parties to the proceedings, and (3) the settlement itself was not executed in good faith. The court apparently granted Roesch's motion to intervene.

The circuit court subsequently sent letters to each party stating, in part:

"[T]he 'Settlement Agreement', which is the subject at hand, was not fully--and in the court's view, adequately--described in the March 13th Petition for Approval to Settle Cause of Action. The actual 'Settlement Agreement' is apparently contingent upon the court's finding good faith and contains what is commonly known as 'loan receipt' provisions that gives a pay-back to the City of Champaign of $350,000 of a total $400,000 [232 Ill.App.3d 46] under certain conditions, although the attorney's

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[173 Ill.Dec. 493] fee...

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