Guardianship of Babb, In re
| Decision Date | 29 September 1994 |
| Docket Number | Docket Nos. 74352,74382,74383 |
| Citation | 642 N.E.2d 1195,205 Ill.Dec. 78,162 Ill.2d 153 |
| Parties | , 205 Ill.Dec. 78 In re GUARDIANSHIP of Clifford A. BABB (Glenn P. Babb, Guardian of the Person and Estate of Clifford A. Babb, Appellee v. The City of Champaign, Appellee (Ed Roesch Equipment Company et al., Appellants)). |
| Court | Illinois Supreme Court |
James C. Kearns, of Heyl, Royster, Voelker & Allen, Urbana, for appellant Ed Roesch Equipment Co.
Lord, Bissell & Brook, Chicago (R. Bruce Duffield, Hugh C. Griffin and Diane I. Jennings, of counsel), for appellant Reach All.
Richard F. Record, Jr., and Mark R. Karpus, Craig & Craig, Mattoon, for appellant Goforth Industries, Inc.
Richard R. Harden, Thomas, Mamer & Haughey, Champaign, for appellee City of Champaign.
The record reveals the following facts. On September 14, 1988, Clifford Babb was trimming trees in the course of his employment with the City of Champaign (City). Babb fell 20 to 40 feet from a cherry picker when the Ford truck supporting the cherry picker caught fire. (A cherry picker is a truck equipped with a device used to elevate workers above the ground so that they can perform tasks such as servicing electrical wires, trimming trees, etc.) The City owned the cherry picker. The City had purchased the Ford truck equipped with a Reach All bucket lift in April 1979 from Ed Roesch Equipment Company (Roesch). As a result of Babb's fall, the City, Babb's employer, became liable to Babb for workers' compensation benefits in the estimated amount of $2.4 million.
Due to Babb's disabling injuries, the probate court appointed Glenn Babb, Clifford Babb's father, as his legal guardian. During the guardianship proceedings before the probate court, Babb's estate filed a petition on March 13, 1990, seeking approval of a settlement agreement with the City. The petition alleged that the City agreed to pay $400,000 to Babb's estate. The settlement agreement would then release the City from secondary liability to any third parties. The probate court entered an order approving the settlement agreement.
On March 21, 1990, Babb's estate and the City filed a petition before the probate court asking that court to find that their settlement agreement was a "good faith" settlement pursuant to section 2(c) of the Contribution Act (740 ILCS 100/2(c) (West 1992)). Notice of the petition was sent to counsel for Roesch, the company that sold the truck to the City. Roesch then sought leave to intervene in the probate action and to object to the petition for a good-faith finding. The probate court granted Roesch's motion to intervene and withdrew its prior order approving the settlement agreement.
On June 4, 1990, Babb's estate and the City filed a second petition before the probate court for approval of the settlement agreement and a petition for a finding of good faith. The revised settlement agreement provided that the City would pay Babb $400,000 (hereinafter, settlement monies). Of that amount, $50,000 was Babb's to keep. However, if Babb should choose to file a tort action against any third parties and successfully recover any damages against potential third parties, he was to repay the City up to $350,000 of the $400,000 settlement monies. If his recovery against third parties was less than $350,000, then Babb was required to repay the City any amount actually received from third parties.
In addition to recovering up to $350,000 of the $400,000 settlement monies from any underlying tort judgment, the City would also retain its workers' compensation lien against Babb's recovery from third parties. This statutory lien would enable the City to recover from any judgment or settlement Babb might receive in the underlying tort action against third parties up to 75% of the $2.4 million it paid to Babb in workers' compensation benefits.
Further, the terms of the settlement agreement required Babb to waive his right to retain 25% of the workers' compensation benefits which are, by statute, allocated to the payment of attorney fees and costs incurred in the prosecution of an underlying tort action against third parties. (820 ILCS 305/1 et seq. (West 1992).) Therefore, the terms of the agreement allowed the City to recover from Babb 100% of its workers' compensation benefits (lien (75%) plus waiver of fees and costs (25%)) if Babb should successfully prosecute an underlying tort action. Additionally, the settlement agreement allowed the City to recover up to $350,000 of the $400,000 settlement monies it paid if Babb should successfully prosecute an underlying tort action. The settlement agreement also included a clause requiring the City's consent prior to Babb's settlement with any third party. In this clause, the City was granted an unqualified right to withhold its consent to any third-party settlement unless it was fully indemnified by such agreement.
The probate court entered an order on June 7, 1990, approving the revised settlement agreement between Babb's estate and the City. In a separate order entered that same day, the court found that the settlement agreement was made in good faith for purposes of the Contribution Act. Roesch, as intervenor, filed a notice of appeal from the good-faith order on June 20, 1990.
On August 24, 1990, during the pendency of Roesch's appeal from the probate court's good-faith order, Babb filed a separate complaint in the circuit court. Babb's complaint, which sounded in products liability, named as defendants Roesch, Reach All, Goforth Industries, Inc., and Ford Motor Company. Thereafter, Sweeney Industries, Inc., Delta Mobile Testing, TBA Sales, and Parker Fluid Connectors were added as defendants. The defendants named in Babb's products liability complaint (hereinafter, tort action) filed third-party complaints against the City for contribution (hereinafter, the contribution action). The City, in turn, filed a motion to dismiss the contribution action on the ground that the settlement agreement approved by the probate court when it entered its good-faith order in the probate action relieved it of all liability for contribution to the defendants. Simultaneous to filing its motion to dismiss the contribution action, the City also filed a motion to stay proceedings in the tort action before the circuit court, pending appellate review of the probate court's good-faith order. The circuit court granted the motion and stayed the tort action proceedings. Reach All, Goforth, Ford, Sweeney, and Parker (hereafter, defendant/intervenors) sought and were granted leave to intervene as appellants in Roesch's pending appeal from the probate court's good-faith order. The appellate court affirmed the probate court's good-faith order. (232 Ill.App.3d at 56, 173 Ill.Dec. 490, 597 N.E.2d 198.) As stated, we allowed the defendant/intervenors' petition for leave to appeal.
We initially note, for the sake of clarity, that the parties to this appeal are involved in three separate actions: (1) the probate action, wherein the probate court approved the settlement agreement between Babb's estate and the City and entered its good-faith order, finding that the settlement was made in good faith; (2) the tort action, which Babb instituted against eight separate defendants, six of whom also appeal from the good-faith order entered in the probate action (the defendant/appellants include Roesch, Reach All, Goforth Industries, Ford Motor Company, Sweeney Industries and Parker Fluid Connectors); and (3) the contribution action that the defendants in the tort action filed against the City. This appeal involves only the good-faith order entered in the probate action. The tort and contribution actions were stayed pending disposition of this appeal from the probate court's good-faith order.
The issue raised in this appeal is whether the probate court properly found that the settlement agreement between Babb's estate and the City was made in good faith within the meaning of the Contribution Act. All of the defendants argue that the trial court abused its discretion in finding the proposed settlement in "good faith" within the meaning of the Contribution Act. The defendant/intervenors, who did not receive notice of the motion for a good-faith finding or the opportunity to participate in the hearing on that motion, argue that the manner in which the settling parties obtained the good-faith order demonstrates that the proposed settlement was not a "good-faith" settlement within the meaning of the Contribution Act. The defendant/intervenors and Roesch also argue that the proposed settlement, which incorporates a "loan-receipt" agreement,...
To continue reading
Request your trial
-
Bocci v. Key Pharmaceuticals, Inc.
...way to eliminate the sinister influence of Mary Carter agreements is to outlaw their use."); In re Guardianship of Babb, 162 Ill.2d 153, 205 Ill.Dec. 78, 642 N.E.2d 1195, 1204-07 (1994) (Mary Carter agreements violate contribution statute); Trampe, 252 N.W. at 678 (undisclosed agreement "cl......
-
Troyer v. Adams, 25174.
...(Quoting Frier's, Inc. v. Seaboard Coastline R.R. Co., 355 So.2d 208, 211 (Fla.Dist.Ct.App.1978)); In re Guardianship of Babb, 162 Ill.2d 153, 205 Ill.Dec. 78, 642 N.E.2d 1195, 1199 (1994) ("clause requiring that a good faith settlement was intended to give courts `occasion to determine whe......
-
Barnai v. Wal-Mart Stores, Inc.
...of (1) the equitable apportionment of damages and (2) settlements with an injured plaintiff. In re Guardianship of Babb , 162 Ill. 2d 153, 171, 205 Ill.Dec. 78, 642 N.E.2d 1195 (1994). Sections 2(b) and 2(c) of the Contribution Act provide in relevant part as follows:"(b) The right of contr......
-
Halleck v. Coastal Bldg. Maintenance Co.
...Field was not made in good faith. The Contribution Act does not define the term "good faith." (In re Guardianship of Babb (1994), 162 Ill.2d 153, 161, 205 Ill.Dec. 78, 642 N.E.2d 1195.) Whether an agreement was made in good faith depends on all of the circumstances surrounding the settlemen......
-
Table of Cases
...Duces Tecum No.001144 , 164 Ill App3d 344, 517 NE2d 1157, 115 Ill Dec 471 (2nd Dist 1987), §§21:220, 21:223 In re Guardianship of Babb , 162 Ill2d 153, 642 NE2d 1195, 205 Ill Dec 78 (1994), §§32:193, 32:232 table oF cases c-493 In re Guardianship of JD , 376 Ill App 3d 673, 878 NE2d 141, 31......
-
Settlement and Alternative Dispute Resolution (ADR)
...are not entitled to a good faith finding and are thus not enforceable in the State of Illinois. [ In re the Guardianship of Babb , 162 Ill 2d 153, 642 NE2d 1195, 205 Ill Dec 78 (1994).] Mary Carter settlement agreements are those in which a settling defendant retains a financial interest in......
-
Settlement and Alternative Dispute Resolution (ADR)
...are not entitled to a good faith finding and are thus not enforceable in the State of Illinois. [ In re the Guardianship of Babb , 162 Ill 2d 153, 642 NE2d 1195, 205 Ill Dec 78 (1994).] Mary Carter settlement agreements are those in which a settling defendant retains a financial interest in......
-
Settlement and Alternative Dispute Resolution (ADR)
...are not entitled to a good faith finding and are thus not enforceable in the State of Illinois. [ In re the Guardianship of Babb , 162 Ill 2d 153, 642 NE2d 1195, 205 Ill Dec 78 (1994).] Mary Carter settlement agreements are those in which a settling defendant retains a financial interest in......