Popovich v. Ram Pipe & Supply Co., Inc., 78-125

• Court: United States Appellate Court of Illinois
• Writing for the Court: NASH; RECHENMACHER; LINDBERG
• Citation: 392 N.E.2d 954,74 Ill.App.3d 343,30 Ill.Dec. 189
• Decision Date: 23 July 1979
• Docket Number: No. 78-125,78-125
• Parties: , 30 Ill.Dec. 189 John T. POPOVICH, Administrator of the Estate of David G. Popovich, Deceased, and John T. Popovich, Individually, Plaintiff-Appellee, v. RAM PIPE & SUPPLY COMPANY, INC., a corporation, and Gregory D. Winans, Defendant-Appellee. Appeal of Curtis A. DUFIELD, Individually and d/b/a Northwest Garage, and Sandra M. Newman, Defendants. CRYSTAL LAKE SCHOOL DISTRICT NO. 47, a Municipal Corporation, Defendant- Appellee, v. RELIANCE INSURANCE COMPANY, Northwest Garage, Inc., a corporation, and Sandra M. Newman, Intervenors-Appellants.

Page 954

392 N.E.2d 954 74 Ill.App.3d 343, 30 Ill.Dec. 189 John T. POPOVICH, Administrator of the Estate of David G.
Popovich, Deceased, and John T. Popovich,
Individually, Plaintiff-Appellee,
v.
RAM PIPE & SUPPLY COMPANY, INC., a corporation, and Gregory
D. Winans, Defendant-Appellee.
Appeal of Curtis A. DUFIELD, Individually and d/b/a
Northwest Garage, and Sandra M. Newman, Defendants.
CRYSTAL LAKE SCHOOL DISTRICT NO. 47, a Municipal
Corporation, Defendant- Appellee,
v.
RELIANCE INSURANCE COMPANY, Northwest Garage, Inc., a
corporation, and Sandra M. Newman, Intervenors-Appellants. No. 78-125. Appellate Court of Illinois, Second District. July 23, 1979.

[74 Ill.App.3d 344]

Page 955

[30 Ill.Dec. 190] Judge, Drew, Cipolla & Kurnik, Timothy T. McLaughlin, Park Ridge, for intervenors-appellants.

Joslyn & Green, Joseph P. Condon and John F. Lampe, Crystal Lake, for plaintiff-appellee.

NASH, Justice:

Intervenors, Reliance Insurance Company, Northwest Garage, Inc., Curtis A. Dufield and Sandra M. Newman, appeal from an order denying them leave to intervene in an action wherein the trial court adjudicated [74 Ill.App.3d 345] the rights and obligations arising under a purported loan receipt agreement to which they and plaintiff were parties.

The underlying action in which this appeal arose was brought by plaintiff, John T. Popovich, administrator of the estate of David G. Popovich, deceased, his eight-year-old son, who was killed on May 22, 1973, while crossing a highway after disembarking from a school bus. Sandra M. Newman was the driver of the bus which was owned and operated by Northwest Garage. The boy was struck by a truck owned by Ram Pipe and Supply Company, Inc., which was driven by Gregory Winans. Each of these parties, together with the Crystal Lake School District, were joined as defendants in the case.

On October 16, 1975, while the case was pending for trial, plaintiff entered into an agreement with defendants Northwest, Newman and Dufield and their liability insurer, Reliance Insurance Company, which they described as a loan agreement. It essentially provided that Reliance would loan plaintiff $20,000, without interest,

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[30 Ill.Dec. 191] which was to be repaid by plaintiff out of any judgment he secured against the remaining defendants In excess of $20,000. On October 22, 1975, this loan arrangement was approved by the probate division of the Circuit Court of McHenry County and the funds were received by plaintiff and thereafter distributed as directed by the court. On January 26, 1976, plaintiff dismissed Northwest, Dufield and Newman as defendants in the case, without prejudice, and in the subsequent trial against the remaining defendants the jury found Winans and Ram Pipe and Supply Company not guilty, but returned a verdict in the sum of $35,000 in favor of plaintiff and against defendant Crystal Lake School District.

On December 8, 1976, Crystal Lake filed its post-trial motion in which it sought, among other things, the construction of the loan agreement as a covenant not to sue and the corresponding reduction of the judgment against it that determination would require. (See Price v. Wabash R.R. Co. (1961), 30 Ill.App.2d 115, 174 N.E.2d 5.) Notice of this motion was not given to Reliance Insurance Company or its insureds, who had been party-defendants until their dismissal by plaintiff in January 1976, and they were not informed of the motion before it was decided by the court. On July 12, 1977, the trial court, as requested by Crystal Lake School District, vacated the $35,000 judgment which had been entered on the verdict in favor of plaintiff and, in its stead, entered judgment in the amount of $15,000. The basis for the reduction of the judgment was a finding by the trial court that the loan receipt agreement was in fact a covenant not to sue and therefore required that the sum received by plaintiff through that means be set off against the verdict ultimately returned against defendant.

On August 5, 1977, plaintiff sought reconsideration of the order and [74 Ill.App.3d 346] Reliance Insurance Company, having by then learned of it, filed a petition for leave to intervene on its own behalf and on behalf of its insureds Northwest Garage, Inc., Curtis A. Dufield and Sandra Newman. The intervenors sought to present their motion to vacate the judgment of July 12 and, as parties to the agreement with plaintiff, to be heard on the issue of its validity. Both plaintiff's motion for reconsideration and the intervenors' petition were denied by the trial court on December 13, 1977. Neither plaintiff, nor any of the other defendants remaining in the case after dismissal of the intervenors, sought to appeal from either the order of July 12, 1977, which construed the agreement between plaintiff and the intervenors, or the order of December 13, 1977, denying intervention. In their notice of appeal the intervenors seek review of both orders and they submit that the interests of judicial economy as well as the interest of the parties herein will best be served by our resolution of all issues in this appeal. The parties have fully argued in this court the issues relating to intervention as well as the substantive question of the construction of the loan agreement.

Crystal Lake has also filed a motion to dismiss from the appeal the issue raised by Reliance as to the validity of the trial court order of July 12, 1977. We took that motion with the case and now deny it. It is Crystal Lake's contention that the intervenors lack standing to appeal from the July 12 order, or from anything other than the denial of the petition to intervene, as they were not parties to the lawsuit on July 12, 1977, when it was entered and that this court lacks jurisdiction to consider its validity.

The parties agree that the applicable standard to determine whether one who is not a party has standing to appeal is whether he has a direct, immediate and substantial interest in the subject matter of the litigation which would be prejudiced by the judgment order or benefited by its reversal. (Gibbons v. Cannaven (1946), 393 Ill. 376, 381, 66 N.E.2d 370, 372; In re Appointment of Special State's Attorneys (1976), 42 Ill.App.3d 176, 181, 1...