Court Opinion

ID: 4253458
Source: CourtListenerOpinion
Date Created: 2018-03-09 23:10:07.917772+00
Date Added: 2024-06-11T07:48:14.551828
License: Public Domain

2018 IL App (1st) 170923

                                                                            SIXTH DIVISION
                                                                            MARCH 9, 2018

No. 1-17-0923

CERTAIN UNDERWRITERS AT LLOYD’S, LONDON, )                           Appeal from the
                                         )                           Circuit Court of
Plaintiff-Appellant,                     )                           Cook County.
                                         )
v. 	                                     )                           No. 13 L 3963
                                         )
REPRODUCTIVE GENETICS INSTITUTE,         )                           Honorable
                                         )                           Brigid M. McGrath,
            Defendant-Appellee.          )                           Judge Presiding.

       JUSTICE CUNNINGHAM delivered the judgment of the court, with opinion.
       Justices Connors and Delort concurred in the judgment and opinion.

                                            OPINION

¶1     Plaintiff-appellant, Certain Underwriters at Lloyd’s, London (Lloyd’s), appeals from the

dismissal of its amended complaint, which sought contribution against the defendant-appellee,

Reproductive Genetics Institute (Genetics Institute). On appeal, the plaintiff argues that the trial

court improperly dismissed its complaint because neither the Joint Tortfeasor Contribution Act

(Contribution Act) (740 ILCS 100/5 (West 2016)) nor case law prohibits its contribution claim.

For the following reasons, we affirm the judgment of the circuit court of Cook County.

¶2                                      BACKGROUND

¶3     This contribution claim arises from a settlement in an Oklahoma state court action against

Lloyd’s insured, The New England Cryogenic Center (NECC), a Massachusetts company that

collects and sells human sperm. In 1999, NECC purchased the assets of Snake River

Technology, d/b/a Rocky Mountain Cryobank (the Cryobank), a corporation in the business of
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fertility assistance through cryopreservation. Its principal place of business was Wyoming. The

Cryobank sent sperm donor samples to the Genetics Institute, an Illinois corporation that

conducts genetic testing, to determine if the sperm donation samples contained the delta-F508

mutation for cystic fibrosis. In 1992, the Genetics Institute sent a letter to the Cryobank, stating

that certain sperm samples, including donor N-170, did not have the delta-F508 mutation.

NECC’s purchase of the Cryobank in 1999 included the purchase of donor N-170’s sperm,

which NECC later advertised as free of the delta-F508 mutation.

¶4        In 2009, NECC sold donor N-170’s sperm to an Oklahoma couple, the Kretchmars.

Donor N-170’s sperm was fertilized with Mrs. Kretchmar’s egg, and she gave birth to a child

with cystic fibrosis. Testing later revealed that donor N-170 is a carrier of the delta-F508 cystic

fibrosis gene mutation.

¶5        On October 21, 2011, the Kretchmars filed a lawsuit against NECC in Oklahoma state

court, alleging that their child’s cystic fibrosis was caused by the delta-F508 mutation in donor

N-170’s sperm. On July 5, 2012, the court in Oklahoma approved a settlement agreement

reached between the Kretchmars and NECC. Lloyd’s, as NECC’s insurer, paid the settlement

proceeds on behalf of NECC. The Genetics Institute was never made a party to the Oklahoma

action.

¶6        On August 17, 2013, Lloyd’s filed its initial complaint against the Genetics Institute in

the circuit court of Cook County. The complaint sought to recover the settlement proceeds that

Lloyd’s had paid to settle the Kretchmar lawsuit in Oklahoma. The complaint had five counts:

contribution, negligence, negligent misrepresentation, breach of warranty of merchantability, and

breach of warranty for a particular purpose. The Genetics Institute filed a motion to dismiss the

complaint pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615

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(West 2012)). The circuit court granted the motion and dismissed the complaint without

prejudice.

¶7      On June 26, 2014, Lloyd’s filed an amended complaint, repleading the counts for

contribution, negligence, and negligent misrepresentation, but replaced the two warranty counts

with one count for breach of express warranty. The Genetics Institute again filed a motion to

dismiss the complaint, pursuant to sections 2-615 and 2-619 of the Code (735 ILCS 5/2-615, 2­

619 (West 2014)). Relying upon Laue v. Leifheit, 105 Ill. 2d 191 (1984), for the proposition that

a claim for contribution must be asserted in the underlying lawsuit, the trial court granted the

Genetics Institute’s motion and dismissed the complaint in its entirety, with prejudice.

¶8      Lloyd’s filed a motion to reconsider, arguing, inter alia, that neither the Contribution Act

nor Laue applies when the underlying action is in a different jurisdiction. The trial court denied

the motion as to the contribution claim, stating: “whether or not defendant may have been subject

to jurisdiction in the Oklahoma litigation is not a factor in dismissal of these counts under the

Laue doctrine.” The trial court, however, granted the motion to reconsider its dismissal of the

count for breach of express warranty. Lloyd’s subsequently filed a second amended complaint,

repleading the contribution claim, along with an amended count for breach of express warranty.

Again, the Genetics Institute filed a motion to dismiss the complaint pursuant to section 2-615.

¶9      On March 22, 2017, the trial court granted the Genetics Institute’s motion to dismiss the

second amended complaint. Lloyd’s then filed a notice of appeal, challenging the trial court’s

dismissal of its contribution claim. 1

        1
        On appeal, Lloyd’s does not raise any issues regarding the trial court’s dismissal of its breach of
express warranty claim.

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¶ 10                                        ANALYSIS

¶ 11    We note that we have jurisdiction to review the trial court’s final order dismissing the

complaint, as the notice of appeal was timely filed. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R. 303

(eff. Jan. 1, 2015).

¶ 12    Lloyd’s asserts that the trial court erred by interpreting Laue to require that a claim for

contribution must be brought in the underlying lawsuit, even when the underlying litigation

commenced in a jurisdiction outside of Illinois. Lloyd’s argues that neither case law nor the

Contribution Act prohibit it from filing a contribution claim in a new action where the Genetics

Institute was not subject to the jurisdiction of the court in the underlying action. Specifically,

Lloyd’s claims that Laue cannot apply to the facts of this case because the court in Oklahoma did

not have personal jurisdiction over the Genetics Institute; thus, it was impossible for Lloyd’s to

have asserted its contribution claim against the Genetics Institute in the underlying lawsuit.

Lloyd’s further argues that public policy considerations support the filing of a separate

contribution action in Illinois because there would be no additional burden, other than on Lloyd’s

itself, and there is no risk of inconsistent verdicts because there was a settlement in the

underlying Oklahoma action.

¶ 13    A motion to dismiss brought pursuant to section 2-615 challenges the legal sufficiency of

a complaint by alleging defects on its face. Alpha School Bus Co. v. Wagner, 391 Ill. App. 3d
722, 735 (2009). A motion to dismiss pursuant to section 2-615 should not be granted unless it is

clearly apparent that no set of facts can be proved that would entitle the plaintiff to recovery. Id.

We review de novo the trial court’s dismissal of a complaint pursuant to section 2-615. Id.

Further, our analysis involves statutory interpretation, which is a question of law that we also

review de novo. Landis v. Marc Realty, L.L.C., 235 Ill. 2d 1, 6 (2009). Section 5 of the 1992

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version of the Contribution Act stated: “A cause of action for contribution among joint

tortfeasors may be asserted by a separate action before or after payment, by counterclaim or by

third-party complaint in a pending action.” 740 ILCS 100/5 (West 1992). In Laue, 105 Ill. 2d at

196, our supreme court held that section 5 of the Contribution Act requires parties to bring

claims for contribution in the underlying action, stating, “We believe it is clear from the statutory

language in section 5 that if there is a pending action *** then the party seeking contribution

must assert a claim by counterclaim or by third-party claim in that action.”

¶ 14   In light of the pronouncement by our supreme court, it is clear to us that the Laue court

read section 5 of the Contribution Act literally and simply in determining that a claim for

contribution must be brought in the pending, underlying action. The court did not discuss any

exceptions or other factors for consideration. Moreover, contrary to argument by Lloyd’s,

nothing in the Laue opinion indicates that the Laue court presumed that the trial court in the

underlying action would have had personal jurisdiction over a third-party defendant.

¶ 15   In an apparent response to Laue, the legislature enacted Public Act 89-7 (eff. Mar. 9,

1995) (amending 740 ILCS 100/5), which allowed a contribution claim to be brought in a

separate action even if not filed in the pending, underlying litigation. See Harshman v.

DePhillips, 218 Ill. 2d 482, 502 (2006). However, that amendment was declared unconstitutional

by our supreme court in Best v. Taylor Machine Works, 179 Ill. 2d 367 (1997). Notwithstanding

the supreme court’s ruling of unconstitutionality in Best, the legislature has not made any

amendments to section 5 of the Contribution Act. If the legislature intended to allow contribution

claims that were not filed in the underlying action, it could have done so in the 21 years since the

Best decision.

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¶ 16   Further, we find our supreme court’s decision Harshman, 218 Ill. 2d 482, to be

instructive. In that case, the plaintiffs were sued for negligence in the United States District

Court for the Northern District of Indiana. Id. at 484. The district court denied the plaintiffs leave

to file a third-party complaint against the defendant. Id. The plaintiffs then filed a separate

contribution action against the defendant in the circuit court of Cook County. Id. The defendant

filed a motion to dismiss, which was denied by the circuit court. Id. However, our appellate court

granted the defendant’s petition for leave to appeal to address the certified question of whether

Illinois law permits a party to bring a contribution claim in a separate proceeding after a court of

another jurisdiction has denied the party leave to file the claim in the underlying proceeding. Id.

This court answered the certified question in the negative, relying on Laue. Id. at 487. The

plaintiffs then appealed to the Illinois Supreme Court. Id. at 488. In affirming the appellate court,

the supreme court stated:

                       “This court will not read exceptions, conditions, or

               limitations into a statute which the legislature did not express if the

               statutory language is clear and unambiguous. *** We are not

               unmindful of the possibility that a court of another jurisdiction

               might deny an Illinois defendant leave to file a contribution claim

               in a pending action, despite the requirement of section 5, in an

               instance where an Illinois court would be more sensitive to the

               effect of the statute’s application. However, we are unconvinced

               that, in enacting section 5, the legislature intended the actions

               taken by plaintiffs in this case to constitute the assertion of a

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                contribution claim by third-party complaint in the pending

                lawsuit.” Id. at 501.

¶ 17    Harshman illustrates that the rule of Laue is strictly applied, even if the court in the

underlying action denied a plaintiff’s attempt to bring a contribution claim. Lloyd’s argues that

Laue cannot apply because the court in Oklahoma did not have personal jurisdiction over the

Genetics Institute, and thus, the court there would have denied its claim for contribution. That is

sheer speculation, as, unlike in Harshman, there is no showing that Lloyd’s attempted to bring a

contribution claim in the Oklahoma litigation. In any case, our supreme court in Harshman made

it clear that section 5 strictly requires a party to file a claim for contribution in the underlying

action and that the rule does not deviate, even when the original court denies the claim seeking

contribution. Clearly, the ruling in Harshman yielded a harsh result, although the plaintiff in that

case attempted to comply with section 5 of the Contribution Act by trying to file the contribution

action in the underlying lawsuit. In this case, Lloyd’s made no such attempt. Thus, even

assuming that the contribution claim would have been denied by the Oklahoma court because of

lack of personal jurisdiction, that affords no relief to Lloyd’s, as Laue and the Contribution Act

strictly required Lloyd’s to bring its claim for contribution in the original, underlying lawsuit in

Oklahoma.

¶ 18    Further, we disagree with Lloyd’s that public policy considerations support the filing of a

separate action in Illinois. Our supreme court in Laue identified several public policy

considerations that support barring contribution claims that are not brought in the underlying

litigation. These considerations include additional burdens on parties and the courts and

inconsistent verdicts. Laue, 105 Ill. 2d at 196-97. Those public policy concerns also apply here.

It is clear that a separate lawsuit would create an additional burden on the parties and court

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system. Moreover, the argument that Laue does not apply when there is a settlement in the

underlying case has already been rejected by this court in Lesnak v. City of Waukegan, 137 Ill.

App. 3d 845, 846 (1985) (“[i]n referring to ‘a pending action,’ the supreme court [in Laue] did

not distinguish between actions that proceed to trial and those that do not).”

¶ 19   Finally, we note that Lloyd’s has argued that, in the alternative, this court should

“undertake to correct the errors in Laue” and determine that it was wrongly decided by the

supreme court. It is well settled that this court is bound to follow the supreme court’s precedent,

and “when our supreme court has declared law on any point, only [the supreme court] can

modify or overrule its previous decisions, and all lower courts are bound to follow supreme court

precedent until such precedent is changed by the supreme court.” Rosewood Care Center, Inc. v.

Caterpillar, Inc., 366 Ill. App. 3d 730, 734 (2006). Although Lloyd’s makes a strong and

reasonable public policy argument, which highlights a harsh result, we are bound to follow Laue.

The argument is plainly not supported by current Illinois case law. The argument, taken to its

logical conclusion, calls upon this court to overrule existing case law established by our supreme

court. This we cannot do.

¶ 20                                  CONCLUSION

¶ 21   For the foregoing reasons, we affirm the circuit court of Cook County’s dismissal of

Lloyd’s complaint.

¶ 22   Affirmed.

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