Townsend v. Sears, Roebuck and Co., 103858.

• Court: Supreme Court of Illinois
• Writing for the Court: Freeman
• Citation: 227 Ill.2d 147,879 N.E.2d 893,316 Ill.Dec. 505
• Parties: Jacob TOWNSEND et al., Appellees, v. SEARS, ROEBUCK AND COMPANY, Appellant.
• Docket Number: No. 103858.,103858.
• Decision Date: 29 November 2007

879 N.E.2d 893 227 Ill.2d 147 316 Ill.Dec. 505 Jacob TOWNSEND et al., Appellees,
v.
SEARS, ROEBUCK AND COMPANY, Appellant. No. 103858. Supreme Court of Illinois. November 29, 2007.

[879 N.E.2d 895]

Dennis J. Powers, Chicago, James M. Brogan, Nancy Shane Rappaport, Philadelphia, Pennsylvania, all of DLA Piper US LLP, Francis A. Citera, Gregory E. Ostfeld, Tanisha R. Jones, of Greenberg Traurig, LLP, Chicago, for appellant.

Michael W. Rathsack, Chicago (Evan A. Hughes, Craig E. Hilborn, Kevin C. Riddle, of counsel), for appellees.

OPINION

Justice FREEMAN delivered the judgment of the court, with opinion:

Plaintiffs, Michelle Townsend, individually and on behalf of her minor son, Jacob, brought a personal injury action in the circuit court of Cook County against defendant, Sears, Roebuck and Company (Sears). A question arose as to whether Illinois or Michigan law would govern the liability and damages issues presented in the case. The circuit court ruled that Illinois law governs these substantive issues, but certified the following question of law for interlocutory appeal pursuant to Supreme Court Rule 308 (155 Ill.2d R. 308):

"Whether Illinois or Michigan law applies to a products liability and negligence action where the plaintiff is a resident of Michigan and the injury occurs in Michigan, the product was manufactured in South Carolina, the defendant is a New York corporation domiciled in Illinois, and the conduct complained of, including certain design decisions, investigations of prior similar occurrences, product testing and the decision to distribute nationally in its retail stores occurred in Illinois[.]"

In its answer, the appellate court reached the same conclusion as did the circuit court. 368 Ill.App.3d 902, 306 Ill.Dec. 755, 858 N.E.2d 552.

We allowed Sears' petition for leave to appeal (210 Ill.2d R. 315). We disagree with the appellate and circuit courts, and

879 N.E.2d 896

hold that Michigan law governs the liability and damages issues presented in this case.

I. BACKGROUND

Michelle and James Townsend, and their son, Jacob, reside on North Begole Road in Alma, Michigan.¹ Sears is a New York corporation with its principal place of business and corporate headquarters in Cook County, Illinois. In the spring of 2000, James purchased a Sears Craftsman brand riding lawn tractor from a Sears store in Michigan. The lawn tractor was manufactured by Electrolux Home Products, Inc. (EHP), in South Carolina. James bought the 20-horsepower, 42-inch-wide lawn tractor for use around his home. This particular lawn tractor developed a faulty engine. In early 2001, James received an identical riding lawn tractor as a warranty replacement. Through early May 2001, James had operated the tractor three or four times to mow the Townsends' 1.8-acre property.

On the afternoon of May 11, 2001, James returned home from work and began to mow his lawn. At this time, his four children, including 3½-year-old Jacob, were inside their home. As James was mowing, he encountered the 16-by 14-foot rectangular railroad-tie-edged planting plot in his front yard. He attempted to mow around the plot by positioning the left edge of the mower deck as close to the ties as possible. However, the tractor became stuck against one of the ties. James shifted the tractor into reverse, looked over his right shoulder, and released the brake. The tractor struggled to move rearward, taking approximately 20 seconds to move approximately six feet. While backing up, he heard a noise, looked to his right, and saw Jacob's sandal on the lawn. He stopped the tractor, turned around, and saw Jacob behind and under the tractor's rear wheels. James overturned the tractor, picked up Jacob, and rushed him to Gratiot Community Hospital in Alma. Jacob was subsequently treated at Sparrow Hospital in Lansing, Michigan. Jacob's right foot was amputated and his lower right leg was severely injured.

Michelle, individually and on behalf of Jacob, filed a complaint against Sears pleading strict product liability and negligence, premised on defective design and failure to warn.² Plaintiffs alleged that Sears "designed, marketed, manufactured, inspected, tested, and sold a Sears Craftsman Lawn Tractor"; that the tractor "was defectively designed, defectively marketed and unreasonably dangerous"; and that the design created such a risk of injury to small children that a reasonably prudent designer and marketer of riding lawn tractors, being fully aware of the risk, would not have put the lawn tractor on the market. Plaintiffs specifically alleged that the tractor lacked a "no-mow-in-reverse" (NMIR) safety feature to prevent back-over injuries. Plaintiff further alleged that Sears had actual knowledge of this specific unreasonably dangerous condition.

Sears filed an answer and affirmative defenses. Discovery ensued. Sears filed a motion to dismiss based on forum non conveniens. The circuit court denied the motion and the appellate court denied Sears' petition for leave to appeal pursuant to Supreme Court Rule 306(a)(2) (210 Ill.2d R. 306(a)(2)).

Plaintiffs filed a motion to apply Illinois law to the issues of liability and damages. Plaintiffs also filed a petition for leave to

879 N.E.2d 897

amend the complaint to add a prayer for relief seeking punitive damages (see 735 ILCS 5/2-604.1 (West 2002)). The circuit court identified conflicts between Illinois and Michigan law pertaining to liability and damages. The court employed the choice-of-law analysis of the Restatement (Second) of Conflict of Laws. The circuit court ruled that Illinois law should govern these substantive issues. The court also granted plaintiffs' petition for leave to plead punitive damages. The circuit court subsequently found that its choice-of-law ruling involved a question of law as to which there was substantial grounds for difference of opinion and that an immediate appeal therefrom may materially advance the ultimate termination of the litigation. Consequently, the court certified the choice-of-law question for interlocutory appeal. See 155 Ill.2d R. 308.

The appellate court allowed Sears' application for leave to appeal. 368 Ill.App.3d 902, 306 Ill.Dec. 755, 858 N.E.2d 552. After identifying the policies embraced in the relevant law of Michigan and Illinois, and examining the contacts each state has with the litigation, the appellate court concluded that Illinois has a superior interest in having its policies applied. Therefore, as did the circuit court, the appellate court concluded that Illinois law should govern the issues of liability and damages presented in the case. 368 Ill.App.3d at 914, 306 Ill.Dec. 755, 858 N.E.2d 552. This court allowed Sears' petition for leave to appeal. See 210 Ill.2d R. 315. We will refer to additional pertinent background in the context of our analysis of the issues.

II. ANALYSIS A. Standard of Review

The parties disagree on the standard of review. An interlocutory appeal pursuant to Supreme Court Rule 308 is ordinarily limited to the question certified by the circuit court, which, because it must be a question of law, is reviewed de novo. Thompson v. Gordon, 221 Ill.2d 414, 426, 303 Ill.Dec. 806, 851 N.E.2d 1231 (2006); see, e.g., Vision Point of Sale, Inc. v. Haas, 226 Ill.2d 334, 340, 314 Ill.Dec. 778, 875 N.E.2d 1065 (2007) (declining to address issues that fall outside proper scope of review of certified question pursuant to Rule 308). However, the scope of this court's review is not limited to determining how the circuit court's question should be answered. "When this court accepts an appeal involving a question of law identified under Rule 308, interests of judicial economy and the need to reach an equitable result oblige us to go beyond the question of law presented and consider the propriety of the order that gave rise to the appeal." Bright v. Dicke, 166 Ill.2d 204, 208, 209 Ill.Dec. 735, 652 N.E.2d 275 (1995) (and cases cited therein); see, e.g., Vision Point, 226 Ill.2d at 354, 314 Ill.Dec. 778, 875 N.E.2d 1065 (reviewing the circuit court's orders that gave rise to the appeal).

The circuit court ruled that Illinois law governs the liability and damages issues presented in this case. It is generally held that a trial court's choice-of-law determination is reviewed de novo. Morris B. Chapman & Associates, Ltd. v. Kitzman, 307 Ill.App.3d 92, 99, 240 Ill.Dec. 235, 716 N.E.2d 829 (1999), aff'd, 193 Ill.2d 560, 251 Ill.Dec. 141, 739 N.E.2d 1263 (2000); see Gramercy Mills, Inc. v. Wolens, 63 F.3d 569, 572 (7th Cir.1995) (same); Dorman v. Emerson Electric Co., 23 F.3d 1354, 1358 (8th Cir.1994) (holding that district court's choice-of-law determination is a legal issue subject to de novo review); Malena v. Marriott International, Inc., 264 Neb. 759, 762, 651 N.W.2d 850, 853 (2002) (same).

Plaintiffs, however, in support of the appellate court's judgment, disagree with this generally accepted holding. According to plaintiffs, cases holding that choice-of-law decisions are reviewed de novo "assume

879 N.E.2d 898

a standard of review without discussing or addressing situations where fact questions must be resolved as a predicate to choosing a state's law." Plaintiffs contend that the circuit court "made both findings of fact (what Sears did and where it did it) and findings of law (which state's law applies, based on those facts)." Plaintiffs suggest that the manifest weight of the evidence standard for fact-finding is more appropriate for reviewing choice-of-law determinations.

We disagree. The circuit court did not hold an evidentiary hearing, weigh the testimony or assess the credibility of witnesses; the record consists solely of documents. Where the circuit court does not hear testimony and bases its decision on documentary evidence, the rationale underlying a deferential standard of review is inapplicable and review is de novo. Dowling v. Chicago Options Associates, Inc., 226 Ill.2d 277, 285, 314 Ill.Dec. 725, 875 N.E.2d 1012 ...