Selby v. O'Dea
|2020 IL App (1st) 181951,156 N.E.3d 1212,441 Ill.Dec. 463
|31 March 2020
|Frank SELBY, Martin Young, Adriana Lopez, and Katherine Scheiwe, n/k/a Katherine Polk, Individually and on Behalf of All Others Similarly Situated, Plaintiffs-Appellants, v. James M. O'DEA, Individually and d/b/a James M. O'Dea & Associates, and State Farm Mutual Auto Insurance Company, Defendants (State Farm Mutual Auto Insurance Company, Defendant-Appellee).
|United States Appellate Court of Illinois
Grace E. Wein, of Wein & Associates, P.C., of Chicago, for appellants.
James P. Gaughan, of Riley Safer Holmes & Cancila LLP, of Chicago, for appellee.
¶ 1 State Farm Mutual Auto Insurance Company, represented by attorney James O'Dea, filed subrogation claims against Frank Selby, Martin Young, Adriana Lopez, and Katherine Scheiwe. Those individuals, the plaintiffs in this case, then flipped the script and sued State Farm and O'Dea for fraud, abuse of process, conspiracy (to commit abuse of process), and malicious prosecution. They claim that State Farm and O'Dea conducted a scheme to obtain fraudulent default judgments against plaintiffs by using improper service of process. And they claim they are not alone; they seek to certify a class of former subrogation defendants similarly mistreated.
¶ 2 Both State Farm and O'Dea filed dispositive motions. O'Dea's failed, and plaintiffs' claims against him are still pending in the circuit court. But the trial court granted State Farm's combined motion for dismissal and summary judgment, dismissing the abuse-of-process claims and awarding summary judgment to State Farm on the claims of civil conspiracy and malicious prosecution.
¶ 3 The first time this matter came before us, a discovery dispute took center stage. Plaintiffs had sought any joint communications between State Farm, O'Dea, and their respective attorneys concerning the defense of this lawsuit. The then-trial judge ruled that those communications were protected by what it called a "joint defense privilege." We agreed that these communications were not subject to disclosure, reasoning that while these joint communications might normally result in the waiver of attorney-client privilege, we would recognize an exception to waiver when the parties were discussing matters of litigation in their common interest. We thus recognized a common-interest exception to the waiver rule, an exception recognized in most jurisdictions throughout the country, but not in Illinois until our decision.
¶ 4 But while the trial judge ruled generally that these communications were protected from disclosure, our view was that the trial court should have conducted an in camera , communication-by-communication review to determine whether each communication was or was not subject to disclosure. As the trial court had not done so, we remanded the matter for that in camera review.
¶ 5 Notably, we also vacated the orders of dismissal and summary judgment, recognizing the possibility that some new information might become available to plaintiffs following that in camera review and having no idea, obviously, whether that new information might make a difference in the outcome of the dispositive motions. We made it clear, however, that we expressed no opinion on the merits of those dispositive rulings.
¶ 6 On remand, a new judge was assigned to the case following his predecessor's retirement. The trial court conducted an in camera review, determined that all communications between State Farm, O'Dea, and their lawyers were protected from disclosure, and thus reinstated the orders of dismissal and summary judgment entered by the previous judge.
¶ 7 Though plaintiffs attack the methods by which the trial judge proceeded on remand, we find no error. The trial judge did exactly what we ordered; it held an in camera hearing, determined (properly so, in our view) that no information was subject to disclosure, and thus re-entered the orders of dismissal and summary judgment in State Farm's favor. From a procedural standpoint, we thus find no error in the new judge's handling of matters.
¶ 8 But now, for the first time, we are substantively reviewing the previous judge's orders, reinstated by the new judge, that dismissed the abuse-of-process claims and entered summary judgment in favor of State Farm on the claims of malicious prosecution and civil conspiracy.
¶ 9 We affirm summary judgment in favor of State Farm on the malicious prosecution claim. But we reverse the dismissal of the abuse-of-process claims, as we find that plaintiffs pleaded sufficient facts to establish State Farm's vicarious liability for O'Dea's alleged abuse of process. And we vacate the grant of summary judgment on the conspiracy count, as we find, for various reasons, that State Farm's right to judgment as a matter of law is not clear and free from doubt.
¶ 11 State Farm Mutual Auto Insurance Company issues automobile insurance policies to consumers in the state of Illinois. It routinely initiates subrogation claims against third parties after paying money to its insureds on claims. To prosecute its portfolio of subrogation claims, State Farm retains outside attorneys.
¶ 12 One of those attorneys representing State Farm in those subrogation cases was defendant O'Dea and his law firm, James M. O'Dea and Associates. And among those who were sued in these subrogation actions by State Farm, via O'Dea, were plaintiffs Selby, Young, Lopez, and Scheiwe.
¶ 13 Plaintiffs (minus Scheiwe) filed suit in October 2010. After rounds of motion practice and amendments, and the addition of Scheiwe as a party-plaintiff, plaintiffs filed the operative pleading here, the third amended complaint (the complaint).
¶ 14 We will have more to say about the abuse-of-process claims (one for each named plaintiff) below. Suffice it to say here, in a nutshell, that beginning in May 2007, O'Dea embarked on a scheme to obtain bogus default judgments in subrogation cases on State Farm's behalf.
¶ 15 First, instead of initially processing his summons through the Cook County Sheriff O'Dea went straight to seeking the appointment of a special process server, in violation of local court rules (if not state law). Second, though he moved the court to appoint a special process server (a private detective), he did not actually use that licensed process server but, instead, used his former brother-in-law, who was not licensed, to serve the summons.
¶ 16 Third, the "verified" complaints that O'Dea filed on State Farm's behalf were not, in fact, verified because they were signed by State Farm employees, not the underlying insureds who would have personal knowledge of the events that resulted in the accidents. But because they were filed as "verified" complaints, O'Dea was able to obtain default judgments after the subrogation defendants (who had never been properly served, if served at all) failed to answer or appear in a timely fashion. As a result of this abuse of process, O'Dea was able to obtain default judgments against individuals who were improperly (if ever) served. O'Dea thus secured fraudulent default judgments against these subrogation defendants.
¶ 17 On top of that, the complaint alleges, though he never actually used the Sheriff, O'Dea charged, as a cost of suit, the fee the Sheriff charges for service of process. If only a single defendant is served, that cost is $60, but the Sheriff charges per defendant, even if multiple defendants reside at the same address, so the fee could double or triple if multiple defendants were sued. All of these improper charges, says the complaint, were stacked on top of the underlying default judgment award against these subrogation defendants.
¶ 18 The abuse-of-process claims further allege that State Farm participated in or later ratified this unlawful conduct, rendering State Farm vicariously liable for O'Dea's misconduct.
¶ 19 The civil-conspiracy claim largely mirrored the abuse-of-process claim, though it added the allegation that, after certain judges had become wise to O'Dea's improper use of substitute process servers, O'Dea began issuing jury demands (at State Farm's direction) to move the cases to a different courtroom with judges who were not familiar with his tactics.
¶ 20 The malicious prosecution claim, brought only by Scheiwe, alleges that State Farm's subrogation lawsuit against Scheiwe was time-barred and thus, the filing of the claim, itself, amounted to malicious prosecution.
¶ 21 As noted, the previous trial judge dismissed the abuse-of-process claim against State Farm. The court granted summary judgment to State Farm on the claims of civil conspiracy and malicious prosecution.
¶ 22 Plaintiffs appealed, claiming several errors in the trial court's orders. We settled some of the questions in the first appeal. Among those was whether State Farm was required to produce information responsive to Interrogatory No. 12, concerning joint communications between State Farm, O'Dea, and their respective lawyers that took place after the filing of this lawsuit. We agreed with the trial court that these communications were generally protected from disclosure but remanded for an in camera , communication-by-communication analysis of whether each specific communication was protected from disclosure.
¶ 23 Among the issues we did not reach in the first appeal were the merits of the court's orders of dismissal and summary judgment. We vacated those rulings only because we did not know, at that moment, what would come of the in camera inspection on remand. We did not know whether new information would come to light that might allow plaintiffs to plead new allegations or add new facts in opposition to summary judgment. We expressed no opinion on the merits of those dispositive rulings.
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SUPPLEMENTING SUPPLEMENTAL BRIEFING.
...and analysis about it. See also id. at 685 n.6. However, a case from an Illinois appellate court fits the bill. Selby v. O'Dea, 156 N.E.3d 1212 (Ill. App. Ct. 2020). There the court explained that it ordered supplemental briefing on an issue not raised below because it is likely to recur in......