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Schramm v. County of Monroe
State: Illinois
Court: 5th District Appellate
Docket No: 5-00-0709 Rel
Case Date: 10/23/2001
                        NOTICE
Decision filed 10/23/01.  The text of
this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.

 

NO. 5-00-0709

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT


TERRY W. SCHRAMM, Individually and as
Special Administrator of the Estate of Vinita L.
Schramm, Deceased, and TERRY W. SCHRAMM,
as Special Administrator of the Estate of Tara R.
Schramm, Deceased,

     Plaintiffs-Appellees,

v.

THE COUNTY OF MONROE and MARY E. 
QUINN, Administrator of the Estate of Jamie A. 
Quinn, Deceased, 

     Defendants-Appellees,

and

THE CITY OF WATERLOO and CRAIG T. INMAN,

     Defendants-Appellants.
------------------------------------------------------------------
THOMAS E. SMITH, Individually, and SHERRY 
L. SMITH, Individually and as Mother and Next
Friend of Alexander M. Smith, a Minor, Samantha K.
Smith, a Minor, and Haley R. Smith, a Minor,

     Plaintiffs-Appellees,

v.

MARY E. QUINN, Administrator of the Estate of
Jamie A. Quinn, Deceased, THE COUNTY OF
MONROE and DANIEL P. HANNON,

     Defendants-Appellees,

and

THE CITY OF WATERLOO and CRAIG T. INMAN,

     Defendants-Appellants.

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Appeal from the
Circuit Court of
Monroe County.


















No. 99-L-20
Consolidated with
 No. 00-L-8















Honorable
Alexis D. Otis-Lewis,
Judge, presiding.
 

JUSTICE KUEHN delivered the opinion of the court:

The City of Waterloo, Illinois (Waterloo), and Craig T. Inman appeal from the trialcourt's October 16, 2000, order finding that a settlement that had been reached among all theplaintiffs and Mary E. Quinn, administrator of the estate of Jamie A. Quinn (Quinn Estate),was made in good faith and that, pursuant to Supreme Court Rule 304(a) (155 Ill. 2d R.304(a)), there was no just reason for delaying either the enforcement or the appeal from thatorder. We affirm.

This case arose out of a tragic set of events that occurred on April 23, 1999, whenJamie A. Quinn, who apparently was suffering from some sort of an emotional problem, tooka shotgun from his parents' home and departed without their permission in their motorvehicle. His parents reported the incident to police. Police approached the Monroe CountyState's Attorney for the issuance of juvenile warrants. Jamie A. Quinn ended up at aWaterloo movie theater. Police were alerted to his presence. Officer Inman, an employeeof the Waterloo Police Department, arrived at the theater, located Jamie A. Quinn in hisparents' motor vehicle, and activated his flashing lights and siren upon approaching thevehicle. Jamie A. Quinn immediately drove off and away from Officer Inman. OfficerInman radioed for assistance, and some sort of a roadblock was set up. Jamie A. Quinneluded the roadblock and continued on in what became a high-speed pursuit by the police. At some point, Jamie A. Quinn pulled out into the opposing lane of traffic to pass anothermotorist, and in the process, he struck a vehicle head-on. That vehicle was operated by TaraR. Schramm and contained Vinita L. Schramm as a passenger, both of whom perished as aresult of the collision. Jamie A. Quinn also died in the collision. A third vehicle wasinvolved in the accident. This vehicle was traveling directly behind the vehicle operated byTara R. Schramm. There were no fatalities in that vehicle, but the five Smith familyoccupants sustained bodily injuries.

Separate lawsuits were filed by the Schramm estates and the Smiths against the QuinnEstate, Waterloo, Inman, and others. Ultimately those suits were consolidated. The QuinnEstate filed a counterclaim against Waterloo and Monroe County for Jamie A. Quinn'swrongful death. Waterloo filed a counterclaim for contribution against the Quinn Estate.

Allstate Insurance Company (Allstate) apparently had a motor vehicle liability policyinsuring Jamie A. Quinn's parents and the motor vehicle involved in this accident. Allstate,on behalf of the Quinn Estate, reached a settlement of the wrongful-death, survivor, andbodily-injury claims in the full occurrence amount of its policy-$100,000. Allstate, on behalfof the Quinn Estate, sought a good-faith settlement finding that would discharge the QuinnEstate from any further liability from any claims which were pending at that time or whichcould later be filed against the estate and that would result in the prejudicial dismissal of suchpending and/or future claims. Those claims would include not only the wrongful-death,survivor, and bodily-injury claims but also any contribution claims. The wrongful-deathlawsuit filed by the Quinn Estate would be unaffected by the good-faith settlement finding. The request for a good-faith settlement finding did not contain a request that the trial courtenter a finding under Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)).

A hearing on the motion was held on August 23, 2000. At the conclusion of thehearing, the trial judge indicated that she was granting the request for a good-faith settlementfinding. In ruling from the bench, the trial judge made no mention of a Rule 304(a) finding. A written order was prepared. The parties to the settlement all received and approved a copyof the order, but a copy was not sent to the attorney for Waterloo and Inman. This order wassomehow presented to the trial judge, who signed it on October 6, 2000, but the order wasnot filed with the court until October 16, 2000, at which time the court sent copies to allparties of record. On that same date, an amended version of the motion for a good-faithfinding was filed, and this version contained a request for a Rule 304(a) finding. A copy ofthe amended motion was not forwarded to the attorney for Waterloo and Inman. Waterlooand Inman appeal.

At oral argument, we learned that the Rule 304(a) finding came about when counselfor Waterloo and Inman suggested to the plaintiffs and the Quinn Estate at the August 23,2000, hearing that they ought to procure such a finding.

From the transcript of the hearing on the good-faith finding, we know that thepossibility of a Rule 304(a) finding was referenced. However, in her preliminary ruling fromthe bench, the trial judge indicated that she found the settlement to be in good faith. The trialjudge did not indicate that she would enter a Rule 304(a) finding. Perhaps that is becausethe original motion for a good-faith finding did not seek a Rule 304(a) finding, or perhapsshe simply did not find that it was necessary to specifically state her intent to enter that order. In any event, a Rule 304(a) finding was clearly contemplated by the parties. Additionally,the parties agreed that a written order of judgment would be distributed to all parties and thatif anyone disagreed with the order, he or she could inform the trial court in writing of theirobjections within 10 days.

A written order was prepared and sent to the parties to the settlement for signature. This written order found that the settlement was made in good faith and also that, pursuantto Supreme Court Rule 304(a), there was no just cause for the delay of enforcement orappeal. The trial judge was presented with the order, and the order was signed on October6, 2000. The order was not actually filed by the court until October 16, 2000. Upon thatdate, copies of the order were sent by the court to all parties of record-including Waterlooand Inman. Apparently contemporaneously, an amended motion for a good-faith finding,which attached copies of the settlement checks and releases and added a request for a Rule304(a) finding, was filed and sent to some of the attorneys of record but was not sent to theattorney for Waterloo and Inman.

Instead of objecting in the trial court, the attorney for Waterloo and Inman elected tofile this appeal. The attorneys for the remaining defendants do not join in the appeal. In thisappeal, counsel argues that the good-faith settlement finding was erroneous and that the Rule304(a) finding was improvidently granted. However, initially, counsel contends that thiscourt lacks jurisdiction over this matter on the theory that the Rule 304(a) finding is void asit was entered on an ex parte basis.

Before we begin our analysis, we find it necessary to discuss the manner in which thiscase came to our court. Counsel for Waterloo and Inman was obviously unhappy with thetrial court's conclusion that the settlement was reasonable and reached in good faith. Whilethe parties to the settlement were not seeking a Rule 304(a) finding, counsel for Waterloo andInman took it upon himself to suggest to the other attorneys that they should ask the court forsuch a finding. Now he contends that the Rule 304(a) finding was not only improvidentlygranted but that it occurred on an ex parte basis. He intimates that he was not aware thatsuch an order was contemplated. He further insinuates that the parties to the settlementagreement have done something ethically inappropriate. Despite counsel's claims to thecontrary, we do not find that the parties conspired together in some insidious plot to preventcounsel from obtaining a copy of the written order confirming the judge's verbal order fromthe bench. To the extent that all parties were not in Judge Otis-Lewis's presence as she puther pen to the written order, then we suppose that one could label the occurrence as an exparte one. However, such a gathering of the attorneys was never contemplated by the partiesor the court. The judge simply asked that a written order be presented to her. While therewas discussion about circulation of the written order, it appears that due to an administrativeerror, this did not occur. We find this whole process rather disingenuous on counsel's partsince he was the very attorney who recommended that the Rule 304(a) finding be included. He could not have been surprised that the order contained the very Rule 304(a) finding thathe recommended. Furthermore, it is not as if counsel never received a copy. He had nodifficulty in filing this appeal. So, while we could send this case back to the trial court inorder to allow counsel for Waterloo and Inman to have a copy of the written order prior toits entry, he would not be able to reargue to the trial court the primary issue that he raises inthis appeal-that the good-faith settlement itself was improperly entered. We suspect thatcounsel would turn around and appeal that order to this court again, which would certainlybe contrary to our ongoing goal of judicial economy. Therefore, we address the merits of thisappeal.

For the reasons stated, we do not find that the order was void for having been enteredon what counsel labels an "ex parte" basis. Waterloo and Inman fail to prove that they havebeen in any way prejudiced or otherwise harmed by the entry of the Rule 304(a) finding,given the fact that their attorney suggested its entry. Savage v. Pho, 312 Ill. App. 3d 553,557, 727 N.E.2d 1052, 1055 (2000).

We next turn to the issue of whether the settlement meets the good-faith requirementof section 2(c) of the Joint Tortfeasor Contribution Act (the Act) (740 ILCS 100/2(c) (West1998)). Before we review the trial court's conclusion on the issue, we look at the provisionsof the Act itself.

In situations where there are two or more people potentially liable for the same injuryor wrongful death, those parties maintain a right of contribution among them. 740 ILCS100/2(a) (West 1998). This contribution right exists only in favor of the tortfeasor who haspaid more than its pro rata share of the damages to the injured party. 740 ILCS 100/2(b)(West 1998). However, no contribution can be obtained by or from any tortfeasor withwhom the injured party has settled in good faith. So, after a settlement with the injured party,the settling tortfeasor can no longer recover contribution from any other nonsettlingtortfeasor. 740 ILCS 100/2(e) (West 1998). Additionally, the settling tortfeasor'scontribution liability to any other nonsettling tortfeasor is completely discharged. 740 ILCS100/2(d) (West 1998).

The Act only requires that the parties' settlement be found by the trial court to havebeen in "good faith." That term is not defined by statute, but relevant cases have concludedthat a determination of good faith must be made by the trial court after a consideration of thetotality of the circumstances. In re Guardianship of Babb, 162 Ill. 2d 153, 161, 642 N.E.2d1195, 1199 (1994). This approach allows the trial courts to give effect to a strong publicpolicy that favors settlements but guards against unfair dealing, collusion, or other wrongfulconduct on the part of the settling parties. Babb, 162 Ill. 2d at 162, 642 N.E.2d at 1199. Atrial court's conclusion that a settlement was reached in good faith is a matter within the trialcourt's sound discretion and will not be reversed on appeal unless we determine that the trialcourt abused that discretion. Babb, 162 Ill. 2d at 162, 642 N.E.2d at 1199.

The argument advanced by Waterloo and Inman primarily relies upon two supremecourt cases which concluded that the purported good-faith settlements at issue were not reallymade in good faith. We review each of these two cases.

In In re Guardianship of Babb, the settlement at issue was between Clifford Babb andthe City of Champaign. Babb, 162 Ill. 2d at 155, 642 N.E.2d at 1196. Clifford Babb wasemployed by the City of Champaign and sustained a work-related injury that resulted inworkers' compensation benefits totaling $2.4 million being paid to him and/or on his behalf. Babb, 162 Ill. 2d at 156, 642 N.E.2d at 1197. Apparently prior to the filing of a third-partylawsuit for his injuries, Clifford Babb and the City of Champaign reached a settlement in theamount of $400,000, with the settlement agreement releasing the City of Champaign fromany secondary liability to third parties. Babb, 162 Ill. 2d at 156, 642 N.E.2d at 1197. Settlement approval was sought in a guardianship case. Babb, 162 Ill. 2d at 156, 642 N.E.2dat 1197. A party who was a potential defendant in Clifford Babb's contemplated civil suitreceived notice of the pending settlement approval and intervened in the case. Babb, 162 Ill.2d at 156, 642 N.E.2d at 1197. The settlement agreement provided that of the $400,000,Clifford Babb could keep $50,000 of the $400,000 no matter what happened but that if hechose to pursue third-party litigation and successfully recovered any damages, he would payback the remaining $350,000 to the City of Champaign. Babb, 162 Ill. 2d at 157, 642 N.E.2dat 1197. Additionally, the City of Champaign retained its right to recover the balance of itslien, up to 75% of the $2.4 million it paid in workers' compensation benefits. Babb, 162 Ill.2d at 157, 642 N.E.2d at 1197. The agreement also required that Clifford Babb agree towaive the 25% attorney fee and costs that he would not normally be required to repay, whichmeant that the City of Champaign could potentially recover 100% of its lien. Babb, 162 Ill.2d at 157, 642 N.E.2d at 1197. The probate court concluded that the settlement was reachedin good faith for purposes of contribution. Babb, 162 Ill. 2d at 158, 642 N.E.2d at 1198. Theappellate court affirmed. In re Guardianship of Babb, 232 Ill. App. 3d 40, 597 N.E.2d 198(1992).

On appeal to the supreme court, the intervening parties who had been sued by CliffordBabb contended that the settlement could not have been made in good faith because of itsincorporation of a loan-receipt agreement. Babb, 162 Ill. 2d at 160, 642 N.E.2d at 1198. Thesupreme court concluded that loan-receipt agreements cannot be consider good-faithsettlements. Babb, 162 Ill. 2d at 171, 642 N.E.2d at 1204. Initially, the court noted that suchan agreement would allow a settling tortfeasor to subvert the prohibition on recoveringcontribution from nonsettling tortfeasors by allowing the settling tortfeasor to indirectlyobtain contribution from the nonsettling tortfeasor by way of the loan-payback provisions. Babb, 162 Ill. 2d at 172, 642 N.E.2d at 1204. Additionally, the court found that a loan-receipt agreement violated the terms of the Act by attempting to deprive the nonsettlingtortfeasors of their statutory right to a setoff. Babb, 162 Ill. 2d at 172-73, 642 N.E.2d at1204. Because Clifford Babb would only actually get to keep the first $50,000 of the$400,000 settlement, the defendants would only be entitled to a $50,000 setoff and not theentire $400,000 amount. Babb, 162 Ill. 2d at 173, 642 N.E.2d at 1204. Depriving thenonsettling tortfeasors of the right to a setoff contravenes the terms of the Act. Babb, 162Ill. 2d at 175, 642 N.E.2d at 1205. By depriving the nonsettling tortfeasors of their setoffrights, the loan-receipt agreement also defeats the purpose of the Act of equitably distributingthe burden of compensating the injured plaintiff amongst all of the tortfeasors. Babb, 162Ill. 2d at 175, 642 N.E.2d at 1205. By receiving a repayment of the loan, the City ofChampaign would not equitably share in the burden of compensating Clifford Babb. Babb,162 Ill. 2d at 175, 642 N.E.2d at 1205.

In Dubina v. Mesirow Realty Development, Inc., No. 88623 (Ill. July 26, 2001), the supreme court held that the settlements at issue were not in good faith because the settlingdefendants received assignments of the plaintiffs' causes of action against the nonsettlingdefendants. Dubina, slip op. at 1. An April 1989 fire in Chicago destroyed a building thathoused several art galleries. Dubina, slip op. at 1. The property damage was extensive. Dubina, slip op. at 1. Thirty-five separate lawsuits involving the damage claims of 112plaintiffs were brought. Dubina, slip op. at 1. Defendants to the suit included owners andmanagers of the building, general contractors who were performing renovations at the timeof the fire, and the various subcontractors. Dubina, slip op. at 1. Eventually, the lawsuitswere all consolidated for discovery and trial. Dubina, slip op. at 2. Some of the defendantsreached settlements with some of the plaintiffs. Dubina, slip op. at 2. There were 29separate settlement agreements, all of which required the plaintiffs to assign their claimsagainst the two nonsettling defendants to some of the settling defendants. Dubina, slip op.at 2. The total amount paid in settlement was $4.5 million. Dubina, slip op. at 2. Thesettling defendants who received the assignments paid an additional $4.5 million for theassignments. Dubina, slip op. at 2. The trial court concluded that each of the settlementagreements was made in good faith. Dubina, slip op. at 2. The trial court thereafter enteredthe orders dismissing the plaintiffs' claims against the settling defendants and dismissing allof the defendants' contribution claims against one another. Dubina, slip op. at 3. Thesettling defendants substituted their attorneys for the plaintiffs' attorneys. Dubina, slip op.at 3. One of the nonsettling defendants appealed. Dubina, slip op. at 3. The appellate courtreversed. Dubina v. Mesirow Realty Development, Inc., 308 Ill. App. 3d 348, 719 N.E.2d1084 (1999).

The supreme court noted that, generally speaking, an assignment of a cause of actionfor property damage is valid in Illinois. Dubina, slip op. at 7. However, it was necessary tolook at the assignments in conjunction with the settlement agreements at issue. Dubina, slipop. at 7. The supreme court concluded that the settlement agreements violated the terms ofthe Act because they deprived the nonsettling tortfeasor of its statutory right to a setoff. Dubina, slip op. at 7. While $9 million was actually paid to the plaintiffs, only $4.5 millionwas available as a setoff because of the manner in which the settlement was structured withhalf of the amount designated as payment for the assignment. Dubina, slip op. at 8. Thecourt stated that the fact that the settling defendants were willing to pay an additional $4.5million for the assignments called into question whether the $4.5 million setoff would resultin the nonsettling tortfeasor paying more than its pro rata share of the final damagejudgment. Dubina, slip op. at 8. Furthermore, the court concluded that the Act's purpose ofequitably distributing the burden of compensating an injured plaintiff was defeated by theassignment, because in theory the settling defendants could recover more than the total $4.5million allowed setoff, resulting in a windfall. Dubina, slip op. at 8. Additionally, thesettlement agreements and assignments violated the Act because they allowed the settlingdefendants to indirectly recover contribution from the nonsettling defendants-somethingclearly prohibited by the Act. Dubina, slip op. at 8-9.

In this case, the Quinn Estate-one of the tortfeasors-settled with all of the plaintiffsand sought to have the settlement declared to have been made in good faith. Waterloo andInman, two of the remaining tortfeasors, objected under the theory that Babb and Dubinaprohibit such a finding. Waterloo and Inman argue that the Quinn Estate's settlement, sincethe Quinn Estate remains in the case as a wrongful-death plaintiff with claims against thenonsettling defendants, could not possibly be in compliance with the Act.

The primary difference between the two cases cited and this case is the fact that inthose two supreme court cases, any monies that the settling tortfeasors recovered wereessentially in the form of contribution from the nonsettling tortfeasors. By way of the loan-receipt agreement or the assignment of claims, those settling tortfeasors were directly beingpaid back for the money they initially paid out. The Quinn Estate is not in any way going tobe reimbursed in the form of contribution. In fact, the Quinn Estate would not be reimbursedat all. The Quinn Estate's claim is completely distinct in that it raises its own wrongful-deathclaim. Consequently, the Quinn Estate is not seeking to indirectly obtain contribution fromthe nonsettling tortfeasors.

Additionally, Waterloo and Inman will receive the full benefit of the setoff of$100,000 if it is ultimately determined that they are liable to the plaintiffs. There is no extraamount of money paid out by the Quinn Estate that would preclude Waterloo and Inman fromreceiving the full and complete benefit of the setoff.

The Act's purpose of equitably distributing the burden of compensating the plaintiffsamongst all of the tortfeasors is also protected. The Quinn Estate paid $100,000, and thatamount is included in the total dollar amount that those plaintiffs receive.

The case is no more complicated than that. Waterloo and Inman try to confuse theissue because the Quinn Estate has its own separate claim, but the issue is one ofcontribution-nothing more. The prohibition from Babb and Dubina does not relate to thesettling tortfeasor's own claim. The prohibition exists to prevent settling tortfeasors frombeing able to recover the amount of money (or potentially more than the settlement amount)that the settling tortfeasor paid in contribution from the nonsettling tortfeasors. Allowingsuch a plan means that the settling tortfeasor, in essence, continues in the case and canrecover contribution from the remaining nonsettling tortfeasors. The Act specificallyprohibits a settling tortfeasor from recovering contribution. Allowing a settling tortfeasorto pursue its own claim for wrongful death does not involve contribution and is notprohibited by the Act.

Accordingly, we conclude that considering the totality of the circumstances, the trialcourt's finding that the Quinn Estate's settlement with the plaintiffs was in good faith doesnot constitute an abuse of the court's discretion.

We finally address the argument that the Rule 304(a) order was improvidently granted. Waterloo and Inman correctly state that a trial court's inclusion of Rule 304(a) language inan order does not automatically mean that the order is appropriate.

Waterloo and Inman cite cases that involve trial court orders that dismissed certaincounts or portions of a complaint on the merits. In those situations, the appellate courts heldthat the orders were not final, although the Rule 304(a) language was included, because notall aspects of a particular branch of the controversy were concluded by that order. See Elkinsv. Huckelberry, 276 Ill. App. 3d 1073, 659 N.E.2d 462 (1995); Rice v. Burnley, 230 Ill. App.3d 987, 596 N.E.2d 105 (1992).

In this case, the settlement of the plaintiffs' claims against the Quinn Estate resultedin the dismissal of those claims, as well as any claims made by the Quinn Estate forcontribution or contribution claims made by remaining nonsettling defendants against theQuinn Estate. The dismissal entered by the trial court in its October 16, 2000, order waspursuant to the operation of law, as section 2(d) of the Act (740 ILCS 100/2(d) (West 1998))requires such a dismissal upon a determination that the settlement at issue was reached ingood faith.

Furthermore, the only claim relative to the Quinn Estate involves its own wrongful-death claim. As indicated in our analysis of the good-faith issue, the contribution claimsrelative to Jamie Quinn's fault in this horrible accident are simply not the same as the QuinnEstate's claims for Jamie Quinn's wrongful death. This is true even though the same partiesare involved and the causes of action relate to the same fatal motor vehicle accident. The factthat a case may come before this court on another occasion does not support the judicial-economy claims of Waterloo and Inman. This case could come before us not only on theQuinn Estate's wrongful-death claim but also on the other plaintiffs' claims against thenonsettling defendants. Those possible facts do not make the trial court's order at issue anyless final. An order approving a settlement constitutes a final disposition as to a definite andseparate part of the litigation and is appealable when the trial court makes a Rule 304(a)finding. Granville Beach Condominium Ass'n v. Granville Beach Condominiums, Inc., 227Ill. App. 3d 715, 720, 592 N.E.2d 160, 162-63 (1992).

The dismissal of the contribution claims and the plaintiffs' claims against the QuinnEstate is final, and the entry of a Rule 304(a) finding in the order was not inappropriate.

For the foregoing reasons, we affirm the judgment of the circuit court of MonroeCounty.

Affirmed.

RARICK and CHAPMAN(1), JJ., concur.



1. Justice Charles Chapman participated in oral argument. Justice Melissa Chapmanwas later substituted on the panel and has read the briefs and listened to the audiotape of oralargument.

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