Pederson v. Mi-Jack Products, Inc.

• Decision Date: 10 March 2009
• Docket Number: No. 1-07-3228.,No. 1-07-2327.,1-07-2327.,1-07-3228.
• Citation: 905 N.E.2d 316
• Parties: John PEDERSON, Plaintiff-Appellee, v. MI-JACK PRODUCTS, INC., Defendant and Third Party Plaintiff-Appellee. (Terex-Ro, Inc., and Terex, Inc., Defendants and Third Party Defendants-Appellees; Henkels and McCoy, Inc., Third Party Defendant and Intervenor-Appellant).
• Court: United States Appellate Court of Illinois

905 N.E.2d 316

John PEDERSON, Plaintiff-Appellee, v. MI-JACK PRODUCTS, INC., Defendant and Third Party Plaintiff-Appellee (Terex-Ro, Inc., and Terex, Inc., Defendants and Third Party Defendants-Appellees Henkels and McCoy, Inc., Third Party Defendant and Intervenor-Appellant).

No. 1-07-2327.

No. 1-07-3228.

Appellate Court of Illinois, First District, Second Division.

March 10, 2009.

Terry A. Fox, Michael Resis, Smith Amundsen LLC, Chicago, IL, for Appellant.

Ashley Danielle Lyles, Joseph Michael O'Callaghan, Chicago, IL, for Pederson.

Stanley V. Boychuck, Kevin V. Boyle, Chicago, IL, for Terex-Ro.

Bruce M. Wall, Scott J. Brown, Julie A. Teuscher, Chicago, IL, for Mi-Jack.

Justice SOUTH delivered the opinion of the court:

Third-party defendant and intervenor-appellant, Henkels & McCoy, Inc. (Henkels), appeals from various orders that were entered by the circuit court in plaintiff John Pederson's product liability and negligence action.

Pederson, who was a Henkels employee, was injured on March 23, 1999, when a boom jib from a truck-mounted crane fell on him. On March 23, 2001, two days prior to the expiration of the two-year statute of limitations, Pederson filed a complaint sounding in negligence and product liability against Mi-Jack Products, Inc. (Mi-Jack), which was the company that leased the crane to Henkels; United Rentals, a company that purchased equipment from Mi-Jack; and Terex Corporation (Terex), the alleged manufacturer of the crane.

On August 10, 2001, after learning that Terex-RO, Inc. (Terex-RO), a subsidiary of Terex Aerials, Inc. (a Terex subsidiary), was the actual manufacturer of the boom crane, Pederson filed his first amended complaint naming Terex-RO as a defendant. The amended complaint was filed four months after the expiration of the applicable statute of limitations, and the trial court subsequently dismissed Terex-RO from Pederson's lawsuit based upon Pederson's failure to timely file suit against Terex-RO. United Rentals was voluntarily dismissed from the suit, and the cause proceeded against Mi-Jack and Terex.

Mi-Jack and Terex each filed third-party complaints for contribution against Henkels. Mi-Jack also filed a third-party complaint for contribution against Terex-RO. On July 29, 2004, Terex filed a motion for summary judgment on the grounds it was not the manufacturer of the allegedly defective crane; rather, it had been manufactured by Terex-RO, which is a separate corporate entity. Terex supported its motion with an affidavit from Norman Hargreaves, the director of product safety for Terex, who averred that Terex-RO was the manufacturer of the crane, and Terex, a separate corporate entity, did not have any involvement in the manufacture, sale, lease, or shipment of the allegedly defective equipment. At the time Terex filed its motion for summary judgment, it had not responded to Pederson's written discovery requests, which included questions pertaining to Terex's corporate structure, or to Henkels' discovery requests, which sought information about equipment specifications and maintenance.

Thereafter, on April 11, 2005, while Terex's motion for summary judgment was pending, Pederson's attorneys filed a motion for leave to withdraw because an "irreconcilable conflict" had developed. The irreconcilable conflict developed after Pederson initiated a malpractice suit against his attorneys due to their failure to timely file suit against Terex-RO. The trial court granted the motion to withdraw on April 21, 2005. The trial also granted Pederson leave to file a pro se appearance and directed him to file a response to Terex's motion for summary judgment. Pederson filed his pro se appearance on May 26, 2005.

On July 20, 2005, Henkels filed a petition to intervene as party plaintiff to protect its workers' compensation lien. On the same date, Henkels also filed a motion to compel discovery against Terex, requesting the trial court to stay ruling on Terex's motion for summary judgment until Terex complied with its outstanding discovery requests.

On July 21, 2005, Pederson filed a pro se motion requesting the trial court to vacate its prior order granting his former attorneys' motion to withdraw as counsel. He explained that he had been unable to find another attorney to represent him, and he was not competent to represent himself. The trial court denied the motion. The trial court also granted Terex's motion for summary judgment because Pederson had not responded to that motion and had informed the court that he did not believe he was able to respond to it. The ruling was made over Henkels' objection. Both Pederson and Henkels filed motions to reconsider the summary judgment order.

On August 3, 2005, the trial court granted Henkels' motion to intervene as party plaintiff but held that all prior orders would "stand." Thereafter, Henkels filed an intervenor complaint, and later, an amended intervenor complaint, sounding in negligence, product liability, and breach of warranty.

On August 12, 2005, Mi-Jack filed a motion to bar Pederson and Henkels from identifying and presenting any Illinois Supreme Court Rule 213(f)(3) (177 Ill.2d R. 213(f)(3)) retained opinion witnesses because Pederson failed to timely disclose any witnesses in conformance with the trial court's prior case management orders. Mi-Jack argued that Henkels, as intervenor, should not be permitted to be in a better position than Pederson. The trial court granted Mi-Jack's motion on October 20, 2005, and struck Henkels' answers to Mi-Jack's Rule 213 interrogatories, which Henkels had filed without leave of court on October 18, 2005.

The trial court entered a second order on October 20, 2005, denying Henkels' and Pederson's motions to reconsider summary judgment in favor of Terex. Thereafter, on March 31, 2006, Pederson filed a motion to consolidate his product liability and negligence action with his malpractice lawsuit. The trial court granted Pederson's motion to consolidate for the purposes of conducting pretrial settlement conferences on April 18, 2006.

On May 23, 2006, Mi-Jack filed a motion for summary judgment, arguing it was entitled to summary judgment because Pederson was barred from presenting any expert testimony in support of his theories of liability and, therefore, could not prevail in his lawsuit. Three days later, Henkels responded with a motion for summary judgment against Mi-Jack. Thereafter, on June 12, 2006, Mi-Jack filed a motion to reconsider the order permitting Henkels to file a complaint as a party plaintiff, arguing that the intervention violated the express terms of section 5(b) of the Illinois Workers' Compensation Act (Act) (820 ILCS 305/5(b) (West 2006)), which permits an employer to file suit only if an injured employee has not filed a claim within three months of the expiration of the statute of limitations. Pederson joined Mi-Jack's motion. Mi-Jack also filed a motion to dismiss Henkels' intervenor complaint, as well as a motion for summary judgment against Henkels.

Thereafter, Pederson filed a pro se motion to approve a settlement and adjudicate Henkels' workers' compensation lien. In the motion, Pederson revealed that the parties had taken part in a settlement conference, and Mi-Jack agreed to pay him $50,000 to settle his lawsuit, and Terex-RO agreed to pay Mi-Jack $25,000 to settle Mi-Jack's contribution claim. Pederson stated he was willing to accept the settlement, but Liberty Mutual Insurance Company, Henkels' workers' compensation carrier, refused to accept the terms of the settlement offer. Accordingly, Pederson sought court approval of the settlement offer and disbursement of $29,404.66 to Henkels as compensation for its workers' compensation lien.

On February 20, 2007, the trial court conducted a hearing on the various pleadings that the parties had submitted. At the conclusion of the hearing, the trial court found that Henkels could remain a party plaintiff because it was entitled to protect its lien, but it would not be permitted to sue in its own right; rather, Henkels would be required "to stand by the complaint of the plaintiff." Accordingly, the trial court struck Henkels' intervenor complaint. The trial court also held that Pederson would not be able to settle the case or "do anything that's going to interfere with the protection of the intervenor's lien." Pursuant to the court's order, Henkels and Pederson would share joint control over the litigation.

On May 8, 2007, Mi-Jack filed a motion seeking modification of the trial court's February 20, 2007, order, arguing that section 5(b) of the Act prohibited Henkels from sharing joint control of Pederson's lawsuit. The trial court granted Mi-Jack's motion on June 7, 2007, and entered an order instructing the parties that the litigation would "move forward under the sole control of Plaintiff John Pederson" and that Henkels "is merely third-party defendant."

Based on the trial court's ruling, Pederson again moved to dismiss the case pursuant to the settlement. The trial court, over Henkels' objection, entered an order dismissing all pending claims with prejudice pursuant to the parties' $50,000 settlement on July 19, 2007. The order explicitly provided that Henkels "will be compensated out of the proceeds of the parties' settlement, in accordance with the terms of the Illinois Workers' Compensation Act, 820 ILCS 305/1, et seq. to the extent of the available proceeds after payment of all attorneys fees and expenses, if any, in accordance with In re Estate of Dierkes, 191 Ill.2d 326, 333, 246 Ill.Dec. 636, 730 N.E.2d 1101 (2000) and Kleeman v. Fragman Construction Co., 91 Ill. App.3d 455, 46 Ill.Dec. 911, 414 N.E.2d 1064 (1980)." The order also denied Henkels' request to maintain a separate action against Mi-Jack following the dismissal of Pederson's case and instructed the parties to file petitions for adjudication of the proceeds of the settlement pursuant to the Act. Henkels filed a motion to stay...