Court Opinion

ID: 9734812
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:46:56.234715+00
Date Added: 2024-06-11T18:26:51.433554
License: Public Domain

MR. JUSTICE SCHAEFER, with whom MR. JUSTICE WARD and MR. JUSTICE RYAN join, dissenting: Mr. Justice Ward, Mr. Justice Ryan and I do not agree with the opinion of the majority, which sanctions for the first time in Illinois the use of a “loan receipt agreement.” This result seriously undermines, without even mentioning it, the long-standing doctrine that prohibits the assignment of a cause of action for personal injuries or for wrongful death. By the arrangement sanctioned in this case, one of two joint tortfeasors is permitted to buy from the injured person or his administrator the cause of action as it relates to him, and then to participate in the assertion of the cause of action against his co-defendants. The proposition stated in the leading case of North Chicago Street R.R. Co. v. Ackley (1897), 171 Ill. 100, has been adhered to until now: “On grounds of public policy the sale or assignment of actions for injuries to the person are void. The law will not consider the injuries of a citizen, whereby he is injured in his person, to be, as a cause of action, a commodity of sale.” 171 Ill. at 108. (See also Putnam v. Continental Air Transport Co. (7th Cir. 1961), 297 F.2d 501.) In our opinion we should not now depart from it. The majority are impressed by the fact that loan agreements, similar in form to the present one, have been used in cases involving common carriers, and shippers and their insurers. The opinion states: “This type of arrangement was endorsed by the United States Supreme Court in Luckenbach v. W. J. McCahan Sugar Refining Co. (1918), 248 U.S. 139, 149, 63 L. Ed. 170, 176, 39 S. Ct. 53, 55, as ‘consonant both with the needs of commerce and the demands of justice.’ ” The situations involved in Luckenbach and the carrier-shipper-insurance-company cases upon which the majority rely differ sharply from that involved in this case. There the liabilities asserted were contractual, both on the part of the carrier and the insurer. The shippers’ property had been damaged, and the device of the loan agreement was employed to satisfy, at least partially, the contractual obligation of the insurance company. The situation in the present tort case is not at all analogous to the subrogation involved when payment is made by an insurer to its insured. Apart from what we think is a misplaced reliance upon the shipper-insurer-carrier cases, the majority opinion advances two grounds of public policy to justify its approval of the loan agreement. It says: “Because of the potential savings to some tortfeasors, funds under this arrangement will be more readily offered to injured plaintiffs than is the case under a covenant to forbear from suit or an outright settlement. Secondarily, loan receipts may tend to simplify complex multi-party litigation, and are desirable from the standpoint of facilitating private resolution of litigation.” The statement that “funds will be more readily offered” apparently means that a defendant will offer more for a loan agreement that he will for a covenant not to sue. Under the loan agreement the lending defendant has a chance of avoiding any financial loss, a chance that he does not have under a covenant not to sue or a release. A plaintiff is allowed to select the defendants whom he will sue, because he is presumed to know how best to assert his rights. (See Chmielewski v. Marich (1954), 2 Ill.2d 568, 571.) Many factors may legitimately influence his free choice. But the law should not permit that choice to be influenced by a payment received from one defendant which is designed to operate as an inducement to the plaintiff to join in a pursuit of the other defendants, to the advantage of both of the pursuing parties. The majority opinion also states that loan-receipt agreements “are desirable from the standpoint of facilitating private resolution of litigation.” We do not agree with this assertion. The agreement in this case contains the plaintiff’s promises to repay the loan “from any judgment I am legally entitled to collect from Koehring Company,” and to “use and pursue any reasonable and legal means which are available to me to collect any judgment I obtain against Koehring Company ***.” There is obviously a high potential for litigation as to the exact meaning of these undertakings. And to the extent, as yet uncertain, that these promises require full pursuit by the plaintiff of all of his rights against the nonsigning defendant, litigation is increased rather than diminished. As the Supreme Court characterized the effect of the agreement in Luckenbach, “In consideration of securing them the right to conduct the litigation, the insurers made the advances.” (248 U.S. at 149.) This, of course, involves, in a tort case, “use of the courts for relief of wrongdoers.” The loan agreement has another unwholesome effect. If the joint tortfeasors differ in the degree of blame they bear for the plaintiff’s injury, the loan agreement tends to throw the entire loss on the less blameworthy party. This is because the more blameworthy party will be willing to offer more in the pretrial auction for the opportunity to enter into a loan agreement, and thus hopefully to escape liability altogether. We fail to see how it can be said that such an arrangement advances the public interest.