Court Opinion

ID: 9715510
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:07:17.417826+00
Date Added: 2024-06-11T09:17:46.634081
License: Public Domain

JUSTICE FREEMAN, specially concurring: In Dubina v. Mesirow Realty Development, Inc., 197 Ill. 2d 185, 198 (2001) (Harrison, C.J., dissenting, joined by Freeman and Kilbride, JJ), the majority held that the agreements between the plaintiffs and the settling defendants, violated the terms of the Joint Tortfeasor Contribution Act (740 ILCS 100/2 (West 1994)), because the agreements deprived Litgen, the nonsettling defendant, of its right to a setoff. Under the agreements, the settling defendants paid $4.5 million to the plaintiffs in settlement of the plaintiffs’ claims, and $4.5 million for the assignments of the plaintiffs’ claim against the non-settling defendant. Thus, Litgen was only entitled to a setoff of $4.5 million, although the plaintiffs had received $9 million. The Dubina court also held that the agreements defeated the Act’s purpose of equitably distributing among all joint tortfeasors the burden of compensating a plaintiff. The settling defendants stood to recoup the $4.5 million denominated as payment for the assignments as well as any damages exceeding $9 million. Thus, the settling defendants could accomplish indirectly that which they could not do directly — recover contribution from Litgen. The majority remanded the cause for further proceedings. In dissent, Chief Justice Harrison noted that when a settling tortfeasor can establish that the settlement was supported by consideration, that is prima facie evidence of the settlement’s good faith. Once a preliminary showing of good faith is made, a presumption arises that the settlement is valid, and the burden shifts to the party challenging the settlement to show that it was not made in good faith. Chief Justice Harrison opined that the trial court did not abuse its discretion when it determined that the agreements were in good faith. Further, Chief Justice Harrison maintained that the agreements facilitated rather than impeded the settlement process, and supported the policy of the Act. Chief Justice Harrison found no merit to the contention that the assignments would apportion the burden of damages among defendants inequitably. Lastly, Chief Justice Harrison noted that any concern about the potential setoff was premature because Litgen had not yet been found liable for damages at a trial. Moreover, while the terms of the agreements allocated only half of the total consideration paid to the settlement, the Act makes clear such labels are not controlling. If the trial court ultimately determined that the full $9 million should be attributed to the settlement, it could allow the full $9 million as a setoff, notwithstanding the fact that the agreements allocated only $4.5 million to the settlement. On remand, the settling defendants attempted to pursue the claims that the plaintiffs had assigned to them. Litgen filed a motion to dismiss, arguing that the settling defendants could not pursue the assigned claims because the settlement agreements which contained the assignments were not made in good faith. The trial court granted the motion and dismissed the settling defendants’ complaint. The appellate court affirmed. This court granted leave to appeal, and now affirms. In today’s opinion, the majority holds that the settling defendants may not pursue the assigned claim against Litgen. In doing so, the majority rejects the settling defendants’ argument that they want to abandon the protection that a good-faith settlement provides under the Act and proceed on the assigned claims against Litgen. The majority states that whether the recovery sought by the settling defendants is grounded upon the Act or the assignments, it is still contribution from a nonsettling tortfeasor. The majority concludes that an arrangement by which a settling defendant attempts to obtain indirect contribution from a nonsettling defendant by an assignment of claims violates the Act and is unenforceable. The majority’s reasoning is consistent with Dubina, 197 Ill. 2d 185. In Dubina the court specifically noted: “The settlement agreements and assignments also violate the Act because they allow the settling defendants to accomplish indirectly that which they could not do directly — recover contribution from Litgen. *** [T]he Act prohibits a settling tortfeasor from recovering contribution from another tortfeasor whose liability is not extinguished by the settlement.” Dubina, 197 Ill. 2d at 196. Dubina being settled law, I must reluctantly join in the result reached by the majority. The result reached by the majority, however, is troubling. In Dubina the court held that the settlement agreements were not entered into in good faith because the agreements conditioned settlement upon assignments of the plaintiffs’ claims. In today’s opinion, the majority holds that the assignments are unenforceable because they flowed from the settlement agreements. The end result is that Litgen, the nonsettling defendant whose employee may have caused the fire, is relieved of liability for the moment. The original plaintiffs dismissed their action against Litgen years ago. The plaintiffs have no interest in the matter, having pocketed the $9 million from the settling defendants. Thus, Litgen is no longer liable to the plaintiffs. As the majority now holds, the assignments of the plaintiffs’ claims are unenforceable and the settling defendants cannot recover the $4.5 million paid for the assignments or any other monies from the nonsettling defendant. To prevent the settling defendants from recovering contribution from Litgen, the court may be allowing Litgen to shed its liability for a fire started in all probability by its employee. Another aspect of the majority opinion is also troubling. It was noted in Dubina, 197 Ill. 2d at 188, that some of the assignees were insurance companies and other nonparties. The majority opinion in the present case does not seem to distinguish between the assignees who were settling defendants and the assignees who were insurance companies and other nonparties. Is it to be understood that the assignments to the insurance companies and other nonparties are also unenforceable? If so, on what grounds? The rationale for striking the settlement agreements and the assignments is that the settling defendants, being tortfeasors, should not be able to recover contribution from another tortfeasor whose liability is not extinguished by the settlement. Does this rationale hold for the insurance companies and other nonparties? Clarification is needed. Although the result in the present case follows from Dubina, it represents an anomaly in law and justice. As acknowledged by the majority, the Contribution Act was intended to ensure equitable apportionment of damages among tortfeasors. See 214 Ill. 2d at 365. The result reached today is simply incompatible with the policy of equitable apportionment of damages. It is an aberrance that challenges the legislature to reconsider the matters at issue and make the appropriate public policy determinations. JUSTICE KILBRIDE joins in this special concurrence.