Case Name: SALLY A. STEWART, Appellant, v. THE VILLAGE OF SUMMIT, Appellee
Court: Illinois Supreme Court
Jurisdiction: Illinois
Decision Date: 1986-10-17
Citations: 114 Ill. 2d 23
Docket Number: No. 62245
Parties: SALLY A. STEWART, Appellant, v. THE VILLAGE OF SUMMIT, Appellee.
Judges: 
Reporter: Illinois Reports, Second Series
Volume: 114
Pages: 23–35

Head Matter:
(No. 62245.
SALLY A. STEWART, Appellant, v. THE VILLAGE OF SUMMIT, Appellee.
Opinion filed October 17, 1986.
RYAN, J., dissenting.
Benjamin H. Cohen, of Chicago (Schwartzberg, Barnett & Cohen, of counsel), and Levine, Shifrin & Critz, of Schaumburg, for appellant.
Vincent Cainkar, of Louis F. Cainkar, Ltd., and Roderick J. Bergin and Matthew J. Egan, of Chicago, for appellee.

Opinion:
JUSTICE GOLDENHERSH
delivered the opinion of the court:
Plaintiff, Sally A. Stewart, appealed from the judgment of the circuit court of Cook County entered in favor of defendant, the village of Summit, upon allowance of its motion for summary judgment. In this action plaintiff sought to recover damages for injuries suffered when she was struck by a truck driven by defendant's employee, Danny Rankovich. Defendant's liability, if any, arises under the doctrine of respondeat superior by reason of the negligence of its employee. The appellate court affirmed in a Rule 23 order (87 Ill. 2d R. 23; 134 Ill. App. 3d 1157), and we allowed plaintiff's petition for leave to appeal (103 Ill. 2d R. 315(a)).
Danny Rankovich was employed by defendant as an emergency medical technician. On September 22, 1979, in response to an emergency call, Rankovich drove his truck from his home to the police department in order to obtain an ambulance. At the intersection of Archer Avenue and 59th Street, Rankovich's truck collided with the automobile of Andrew J. Kociper. Plaintiff, who was walking across 59th Street on the east side, was struck and injured by Rankovich's truck after it deflected off Kociper's car. Plaintiff was hospitalized for approximately one month, and her medical expenses exceeded $16,500.
After filing this action against Rankovich, Kociper, and defendant, plaintiff, upon payment of $5,000, entered into a covenant not to sue Rankovich. The covenant provides in pertinent part:
"It is understood that the said Danny Rankovich expressly denies any negligence on his part causing or contributing to said accident and any liability therefor, and that this agreement is entered into for the purpose of avoiding litigation and shall not be construed as an admission of liability on his part* and that undersigned hereby expressly reserves the right to sue any other person or persons against whom he may have or assert any claim on account of damages arising out of the above described accident."
The circuit court allowed defendant's motion for summary judgment, holding that because defendant's liability was derivative, based on the doctrine of respondeat superior, the covenant not to sue extinguished plaintiff's cause of action against defendant. The appellate court, citing Holcomb v. Flavin (1966), 34 Ill. 2d 558, affirmed the judgment.
Since both parties construe the agreement between plaintiff and Rankovich to be a covenant not to sue, this appeal presents the sole question whether the execution of a covenant not to sue defendant's employee, which provides that the "undersigned [plaintiff] hereby expressly reserves the right to sue any other person or persons against whom he may have or assert any claim on account of damages arising out of the above described accident," serves to extinguish plaintiff's claim against defendant under the doctrine of respondeat superior.
Plaintiff contends that this case is governed by section 2(c) of the Contribution Among Joint Tortfeasors Act (Ill. Rev. Stat. 1979, ch. 70, par. 302(c)) (Act), which provides:
"(c) When a release or covenant not to sue or not to enforce judgment is given in good faith to one or more persons liable in tort arising out of the same injury or the same wrongful death, it does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms so provide but it reduces the recovery on any claim against the others to the extent of any amount stated in the release or the covenant, or in the amount of the consideration actually paid for it, whichever is greater."
Plaintiff contends that this statute explicitly preserves any claim which she might have against defendant and that failure to specifically reserve the claim against defendant did not serve to extinguish it. In the alternative, plaintiff urges, that should this court hold the Act inapplicable, we should hold, in accordance with the opinions of the majority of commentators and the case law in other jurisdictions, that a covenant reserving rights against unnamed tortfeasors does not operate to release those tortfeasors, including employers only secondarily liable. (Plath v. Justus (1971), 28 N.Y.2d 16, 268 N.E.2d 117, 319 N.Y.S.2d 433; Hamburger v. Paterson Tallow Co. (1939), 122 N.J.L. 457, 5 A.2d 487; Henry B. Steeg & Associates, Inc. v. Rynearson (1968), 143 Ind. App. 567, 241 N.E.2d 888; Dworak v. Olson Construction Co. (1976), 191 Colo. 161, 551 P.2d 198.) Further, plaintiff argues that prior to the enactment of the Act this court had not addressed the question whether a covenant not to sue containing a "generic" reservation of rights operates to release any unnamed persons. Plaintiff urges that the disposition of this issue falls between two of our earlier cases —Holcomb v. Flavin (1966), 34 Ill. 2d 558 (covenant not to sue employee containing no reservations of rights against others held to extinguish plaintiff's cause of action against employer), and Edgar County Bank & Trust Co. v. Paris Hospital, Inc. (1974), 57 Ill. 2d 298 (covenant not to sue physician employed by hospital containing express reservation of the right to seek recovery from named hospital, held not to bar an action against the hospital).
Finally, plaintiff contends that the covenant not to sue is a contract and should be construed to carry out the intentions of the parties. (Porter v. Ford Motor Co. (1983), 96 Ill. 2d 190.) As such, plaintiff urges that the circumstances of this case make it clear that it was the intent of both plaintiff and Rankovich to permit plaintiff to proceed against defendant.
Defendant argues that section 2(c) of the Act is inapplicable to situations involving liability based on respondeat superior and that it applies only to "true" joint tortfeasors, all of whom are active "wrongdoers." Citing Holcomb v. Flavin (1966), 34 Ill. 2d 558, the facts of which, it contends, are "legally indistinguishable" from those here, defendant argues that its liability was extinguished by plaintiff's execution of the covenant not to sue defendant's employee whose negligence was the basis of defendant's derivative liability. (Holcomb v. Flavin (1966), 34 Ill. 2d 558; Bristow v. Griffitts Construction Co. (1986), 140 Ill. App. 3d 191.) Defendant argues that only when the covenant includes precise and specific language and the name of the party against whom the plaintiff's rights are reserved is the plaintiff's right to maintain an action against that party preserved. Edgar County Bank & Trust v. Paris Hospital, Inc. (1974), 57 Ill. 2d 298.
Finally, defendant argues that, even if the Act is found to be applicable, defendant's liability was still extinguished by the covenant not to sue Rankovich. Defendant bases this argument on section 3 of the Act, which provides, in pertinent part, that "[i]f equity requires, the collective liability of some as a group shall constitute a single share." (Ill. Rev. Stat. 1979, ch. 70, par. 303.) Defendant urges that because its liability arose solely under the doctrine of respondeat superior, the liability of defendant and Rankovich, its agent, should be measured collectively. As such, since plaintiff has already settled with and received payment from Rankovich, she should not be awarded a double recovery for a single tortious act.
There is a split in the authorities concerning whether recovery from a defendant secondarily liable is barred by a covenant not to sue the active tortfeasors even though the covenant contains a reservation of the right to sue others for damages arising out of the same occurrence. The rationale of one line of authorities holding the action barred is that because the liability of the master or principal is derivative or secondary, exoneration of the servant or agent extinguishes the liability of the master or principal. (See Annot., 92 A.L.R.2d 533 (1963).) Some of the opinions also suggest that the theory serves to avoid circuity of action. We do not agree with defendant that our prior cases require us to hold that plaintiff's claim is so barred.
In Holcomb v. Flavin (1966), 34 Ill. 2d 558, this court held that the execution of a covenant not to sue an employee served to extinguish the plaintiff's claim against his employer. The document involved in Holcomb was considered by all parties to be a covenant and not a release, but contained no reservation of rights to pursue plaintiff's claim against others. In Edgar County Bank & Trust Co. v. Paris Hospital, Inc. (1974), 57 Ill. 2d 298, the plaintiff executed a covenant not to sue a doctor but specifically reserved the right to pursue his claim against the defendant hospital. In rejecting the defendant's contention that its liability was extinguished, the court said:
"Defendants, citing Holcomb v. Flavin [(1966)], 34 Ill. 2d 558, contend that the execution of the covenant not to sue Dr. Acklin, notwithstanding the provision therein that it would not affect plaintiff's claim against his employer, extinguished the defendant hospital's liability and bars plaintiff's action against both defendants. Acknowledging that in American National Bank and Trust Co. v. The Pennsylvania R.R. Co. [(1968)], 40 Ill. 2d 186, the court distinguished the covenant not to enforce a judgment from the covenant not to sue in Holcomb, on the ground, inter alia, that it expressly reserved the covenantor's right to enforce the judgment against another defendant railroad, whereas in Holcomb no right of action against the employer was reserved, defendants argue that Holcomb controls here and that plaintiff's action is barred.
In Holcomb the court pointed out that in those jurisdictions which had held that the covenant not to sue the servant or agent did not bar an action against the master or principal, the instruments had contained express reservations of the covenantor's right to proceed against the covenantee's master or principal. (See also Steeg and Associates v. Rynearson [(1968)], 143 Ind. App. 567, 241 N.E.2d 888; Plath v. Justus [(1971)], 28 N.Y.2d 16, 319 N.Y.S.2d 433, 268 N.E.2d 117.) The controlling distinction drawn in American National Bank applies here, and we hold that the covenant not to sue Dr. Acklin, which contained an express provision that it did not affect plaintiff's right to seek recovery against his employer, did not serve to bar plaintiff's action against either the defendant hospital or Dr. Acklin's co-employee, defendant Augusta Bostick." 57 Ill. 2d 298, 301-02.
It is obvious from the opinion in Edgar that the court did not interpret Holcomb to hold that the execution of a covenant not to sue an employee effected under all circumstances a release of the employer. Edgar makes it clear that the claim against an employer, although based on respondeat superior, if reserved, survives the covenant not to sue. This is consistent with the long-established rule that the agreement is the controlling factor and the governing fact to be determined is the intent of the parties. (City of Chicago v. Babcock (1892), 143 Ill. 358; Essington v. Parish (7th Cir. 1947), 164 F.2d 725.) The provision that the "undersigned hereby reserves the right to sue any other person or persons against whom he may have or assert any claim on account of damages arising out of the above described accident" explicitly and unambiguously demonstrates that the parties intended that the right to sue anyone was all inclusive, with no exceptions made because of the basis of the claim, so long as it arose out of the same occurrence.
We conclude that the parties intended that plaintiff's right to sue all persons or entities other than Rankovich survive the execution of the covenant, and in allowing defendant's motion for summary judgment, the circuit court erred.
Because of the conclusion reached we need not and do not reach the question whether the provisions of section 2(c) of the Act are applicable here. We note parenthetically that the provisions of section 2(c) indicate that the public policy of this jurisdiction is that no instrument purporting to terminate the liability of a tortfeasor serves to discharge any other tortfeasor from liability for the same injury unless its terms so provide. Our prior decisions are consistent with that policy.
For the reasons stated, the judgments of the appellate and circuit courts are reversed and the cause is remanded to the circuit court of Cook County for further proceedings consistent with this opinion.
Reversed and remanded.