Wilda v. JLG Indus.

• Decision Date: 14 February 2022
• Docket Number: 16-cv-10088
• Court: U.S. District Court — Northern District of Illinois
• Parties: PATRICK R. WILDA, individually, and as independent administrator of the ESTATE OF PATRICK C. WILDA, deceased, Plaintiff, v. JLG INDUSTRIES, INC., Defendant. JLG INDUSTRIES, INC., Third-Party Plaintiff, v. ILLINI HI-REACH, INC., Third-Party Defendant. ILLINI HI-REACH, INC., Third-Party Plaintiff, v. AREA ERECTORS, INC., Third-Party Defendant.

PATRICK R. WILDA, individually, and as independent administrator of the ESTATE OF PATRICK C. WILDA, deceased, Plaintiff,
v.
JLG INDUSTRIES, INC., Defendant.

JLG INDUSTRIES, INC., Third-Party Plaintiff,
v.
ILLINI HI-REACH, INC., Third-Party Defendant.

ILLINI HI-REACH, INC., Third-Party Plaintiff,
v.
AREA ERECTORS, INC., Third-Party Defendant.

No. 16-cv-10088

United States District Court, N.D. Illinois, Eastern Division

February 14, 2022

MEMORANDUM OPINION AND ORDER

Steven C. Seeger, United States District Judge.

This case is about a fatal injury suffered while a construction worker was using a manlift. The estate sued the manufacturer of the manlift, JLG Industries. JLG, in turn, sued the distributor, Illini Hi-Reach, for indemnification. And Illini Hi-Reach sued the employer, Area

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Erectors, for indemnification. The thrust of the case is about how to allocate responsibility for the fatal accident between the manufacturer, the distributor, and the employer.

Years of discovery followed. This Court ultimately ruled on a collection of summary judgment motions. For present purposes, the most important ruling involved the claims by JLG (again, the manufacturer) against Illini Hi-Reach (again, the distributor). The Court ruled that Illini Hi-Reach had an obligation to indemnify JLG under the terms of their contract.

After this Court ruled on the motions for summary judgment, the estate and JLG participated in a mediation. They reached a settlement. That settlement potentially has big implications for Illini Hi-Reach. At the summary judgment stage, this Court ruled that Illini Hi-Reach must indemnify JLG, so an agreement between the estate and JLG is ultimately about the size of the bill that Illini Hi-Reach must foot.

The estate and JLG now seek a ruling that the settlement was in good faith within the meaning of the Illinois Joint Tortfeasor Contribution Act. See JLG's Mtn. (Dckt. No. 417); Wilda's Mtn. (Dckt. No. 419). And JLG also moves for severance of the third-party action and the entry of judgment against Illini Hi-Reach under Rule 58(b). See JLG's Mtn. to Sever and Enter Judgment (Dckt. No. 418). Illini Hi-Reach opposes all three motions.

For the reasons stated below, the motions are denied.

Background

To streamline this Opinion, the Court will assume familiarity with the background of the case, as explained in its prior rulings. See 7/2/20 Opin. (Dckt. No. 366); 2/3/21 Opin. (Dckt. No. 384); 2/10/21 Opin. (Dckt. No. 385). The Court will simply cover the essentials.

The case involves a tragic accident involving a construction worker. Patrick C. Wilda was helping to build a warehouse in the southern part of the Chicagoland area. The accident

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happened while Wilda was on a manlift manufactured by JLG. A manlift is a “self-propelled hydraulic personnel lift equipped with a work platform on the end of an elevating and rotating boom.” See JLG Operation and Safety Manual, at § 4.1 (Dckt. No. 288-7). It is a scaffold at the end of an articulating boom, on wheels. See Bond Report, at 12, 15 (Dckt. No. 419-1, at 20, 23 of 175) (showing pictures of a manlift). Somehow, Wilda became trapped between the manlift and one of the ceiling beams, and asphyxiated.

JLG manufactured the manlift and delivered it to Illini Hi-Reach, one of its distributors. Illini Hi-Reach, in turn, rented the manlift to Area Erectors, a construction company, to use at the jobsite. Illini Hi-Reach also had a JLG safety guard for the manlift, called SkyGuard, available as optional equipment. But Illini Hi-Reach didn't install the guard on the manlift that it rented to Area Erectors.

The estate filed suit against JLG (the manufacturer). JLG later sued Illini Hi-Reach (the distributor). And Illini Hi-Reach, in turn, sued Area Erectors (the employer).

After years of litigation, the parties filed a flurry of summary judgment motions. This Court granted JLG's motion for summary judgment on its indemnification claim against Illini Hi-Reach. See 7/2/20 Opin. (Dckt. No. 366). So Illini Hi-Reach has a duty to indemnify JLG.

Illini Hi-Reach and Area Erectors later stipulated to dismissal of Illini Hi-Reach's claims against Area Erectors under Rule 41(a)(1)(A)(ii) without prejudice. See 5/12/21 Order (Dckt. No. 404). At that point, Illini Hi-Reach remained as a party, but only as an indemnitor to JLG.

After ruling on the summary judgment motions, this Court set the case for trial on the estate's claims against JLG. Two months before trial, the estate and JLG participated in a mediation, which culminated in a settlement agreement. See Joint Statement Regarding

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Settlement (Dckt. No. 411). They settled for $6, 250, 000. See Settlement Agreement, at § 3 (Dckt. No. 417-1). Illini Hi-Reach participated in the mediation.

The estate and JLG then filed motions asking this Court to make a finding that the settlement was made in good faith within the meaning of the Illinois Joint Tortfeasor Contribution Act. See JLG's Mtn. (Dckt. No. 417); Wilda's Mtn. (Dckt. No. 419). And JLG also moves to sever the third-party action and enter judgment against Illini Hi-Reach under Rule 58(b). See JLG's Mtn. to Sever and Enter Judgment (Dckt. No. 418).

Discussion

I. The Illinois Joint Tortfeasor Contribution Act

The estate and JLG ask this Court for a finding that they reached their settlement in good faith under the Illinois Joint Tortfeasor Contribution Act. See JLG's Mtn. (Dckt. No. 417); Wilda's Mtn. (Dckt. No. 419). That request suffers from a basic problem: there's no contribution claim in the case.

At common law, a tortfeasor did not have a right of contribution against another tortfeasor, even though they shared responsibility for the same injury to the same victim. See Nw. Airlines, Inc. v. Transport Workers Union of America, AFL-CIO, 451 U.S. 77, 86-88 (1981). A plaintiff could sue and collect full damages from one tortfeasor, and that tortfeasor could not recover anything from a second tortfeasor. See William M. Landes & Richard A. Posner, The Economic Structure of Tort Law, 191 (1987); see also W. Page Keeton et al., Prosser and Keeton on the Law of Torts, § 50 (5th ed. 1984). So one tortfeasor could be left holding the bag, and another could get off scot-free. That's over-payment and under-deterrence.

The Contribution Act makes sure that joint tortfeasors pay their fair share, so that there is an equitable distribution of tort liability. The Act creates a statutory “right of contribution” when

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“2 or more persons are subject to liability in tort arising out of the same injury.” See 740 ILCS 100/2(a). A “tortfeasor who has paid more than his pro rata share of the common liability” can bring a claim against another tortfeasor. See 740 ILCS 100/2(b); see also Koh v. Village of Northbrook, 2020 WL 6681352, at *5 (N.D. Ill. 2020) (“[T]he Act gives the unfairly burdened tortfeasor the right to sue the others for contribution.”).

The statute places a cap on the amount that one tortfeasor can recover from another. A tortfeasor who paid more than its fair share can recover the amount of the overpayment from another tortfeasor. That is, “his total recovery is limited to the amount paid by him in excess of his pro rata share.” Id. So a tortfeasor can compel another tortfeasor to pay its fair share of the bill - and nothing else.

The Act also covers how to handle settlements with the injured party. When a tortfeasor settles with the plaintiff, it “does not discharge any of the other tortfeasors from liability, ” unless the settlement agreement says so. See 740 ILCS 100/2(c). But it does “reduce[] the recovery on any claim against the others” by the injured party (and thus prevents a windfall). Id.

A tortfeasor who settles with the injured party in good faith has no duty to pay contribution to another tortfeasor. “The tortfeasor who settles with a claimant pursuant to paragraph (c) is discharged from all liability for any contribution to any other tortfeasor.” See 740 ILCS 100/2(d). A settlement “pursuant to paragraph (c)” means a settlement “in good faith.” See 740 ILCS 100/2(c). “Put another way, the Act extinguishes the right of contribution if the tortfeasor and the plaintiff have entered into a good-faith settlement.” See Koh, 2020 WL 6681352, at *5.

That provision encourages settlement. It allows a tortfeasor to settle with an injury party, without looking over his or her shoulder, wondering when another tortfeasor will show up with

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the rest of the tab. Id. at *4 (“A tortfeasor considering whether to settle a case would think twice about doing that if the tortfeasor remains vulnerable to a contribution suit from a co-defendant.”). One of the primary benefits of settlement is finality, so the Act ensures that tortfeasors know what they're getting when they settle claims. See Johnson v. United Airlines, 203 Ill.2d 121, 271 Ill.Dec. 258, 784 N.E.2d 812, 821 (2003) (“[T]he Contribution Act seeks to promote two important public policies - the encouragement of settlements and the equitable apportionment of damages among tortfeasors.”).

But the Act also discourages settlements that are not made in good faith. So, for example, imagine if a defendant settled a toxic tort case for $1, and saddled the other defendants with the rest of an enormous liability. A court might find that the settlement was not in good faith, and thus preserve the ability of the other tortfeasors to bring a claim for contribution down the road. See, e.g., Mercola v. Abdou, 223 F.Supp.3d 720, 731-33 (N.D. Ill. 2016) (holding that a settlement for $25, 000 was not in good faith).

A tortfeasor who settles with the injured party also loses the ability to bring a contribution claim against a non-settling tortfeasor. “A tortfeasor who settles with a claimant pursuant to paragraph (c) is not entitled to recover contribution from another tortfeasor whose liability is not extinguished by the...