Court Opinion

ID: 9516835
Source: CourtListenerOpinion
Date Created: 2023-08-06 23:53:38.820735+00
Date Added: 2024-06-11T09:39:28.774466
License: Public Domain

JUSTICE NICKELS, dissenting: The city’s assignment of the contribution action to plaintiff was valid. The majority erroneously concludes that the city did not pay more than its pro rata share of the common liability and therefore a right of contribution never arose. In addition, the majority ignores case law and the policies underlying the Contribution Act in reaching its conclusion. For these reasons, I respectfully dissent. Initially, the majority states that the city and plaintiff agreed that the common tort liability was $500,000. This is not supported by the settlement agreement. At best, the settlement agreement suggests that a settlement offer of $500,000 plus waiver of the workers’ compensation lien was made at some point in the negotiation process. This settlement offer, however, was never accepted. Neither plaintiff nor defendant employer have, in any way, suggested on appeal that the common liability was established as $500,000. According to the settlement agreement, the city and plaintiff specifically agreed that $400,000 represented the entire common tort liability against all parties arising from the death of plaintiff’s husband. The circuit court found this agreement to be in good faith. The majority speculates as to how the settlement was reached but ignores the primary issues raised in the lower courts and on appeal, namely, whether a contribution action is generally assignable and whether the specific assignment to plaintiff violates public policy. I recognize, as stated by the majority, that the assignment procedure used by the city and plaintiff is not straightforward. Plaintiff seeks to recover an additional amount as contribution liability beyond the $400,000 settlement amount. I would, however, address the arguments raised by the employer, rather than avoid the primary issues. The employer first argues that the Contribution Act only provides a right of contribution for tortfeasors, and thus, assignment to any nontortfeasor is prohibited. The employer also argues that the assignment to plaintiff violates public policy because it allows plaintiff to recover a "windfall” beyond the settlement amount. The Contribution Act is silent as to whether a right of contribution can be assigned to a nontortfeasor, and thus, the question of assignability must be answered in accordance with general common law principles. It is well-settled that torts to property and most contract actions are assignable. (North Chicago Street R.R. Co. v. Ackley (1897), 171 Ill. 100, 108-09; Christison v. Jones (1980), 83 Ill. App. 3d 334, 337.) In contrast, personal injury actions and some contract actions of a personal nature are not assignable. (Ackley, 171 Ill. at 108-11; Christison, 83 Ill. App. 3d at 337.) In determining whether a claim can be assigned, a court examines the nature of the claim. Compare Christison, 83 Ill. App. 3d 334 (a legal malpractice claim is not assignable because of the personal nature of the attorney-client relationship, which requires the utmost degree of fidelity, honesty, good faith, and confidentiality), with Daugherty v. Blaase (1989), 191 Ill. App. 3d 496 (an insurance malpractice claim is assignable because the business relationship between an insurance broker and a client is not personal). This case involves the assignment of a right of contribution. Although a right of contribution may arise from a personal injury tort, it is distinct from the underlying tort. (See Doyle v. Rhodes (1984), 101 Ill. 2d 1, 14; see also Scott & Fetzer Co. v. Montgomery Ward & Co. (1984), 129 Ill. App. 3d 1011, 1023 (the Contribution Act creates a separate statutory right of restitution).) An action for contribution is not an action of a personal nature but rather an action for the equitable division of damages. The nature of the city’s action for contribution is recovery for overpayment of its share of the total damages rather than for personal injury, and such claims have been considered assignable. (See Puckett v. Empire Stove Co. (1989), 183 Ill. App. 3d 181; see also 18 Am. Jur. 2d Contribution § 3 (1985).) Thus, a right of contribution is generally assignable. Next, the employer argues that the specific assignment of the contribution action to plaintiff violates public policy. This court has recognized two policies that support the Contribution Act: (1) the promotion of settlement, and (2) the equitable sharing of damages. (In re Guardianship of Babb (1994), 162 Ill. 2d 153, 171.) The policies underlying the Contribution Act support the assignment of the contribution action to plaintiff. First, the assignment of the right of contribution to plaintiff encouraged settlement. It provided an additional means of settling where the city and plaintiff may not have settled otherwise. The city and plaintiff disagreed as to the amount of settlement. The city was unwilling to settle the entire suit and pursue a risky fiction for contribution. Litigation can be uncertain and costly, and an alleged tortfeasor may want to avoid these aspects of litigation. In this instance, however, plaintiff placed a greater value on the contribution action than the city did and was willing to take those risks. Second, allowing assignment to plaintiff in this case promotes the equitable sharing of damages. By receiving an assignment from the city, plaintiff has not changed the nature of the contribution action or the defenses available to the employer. In settling the entire suit with plaintiff, the city had the absolute right to recover a pro rata share of the settlement amount from the employer. Both before and after assignment, the employer would be responsible only for the employer’s pro rata share of the settlement amount. In no event would the employer be required to contribute more because of the assignment. Moreover, the employer did not challenge the settlement amount of $400,000 and has not challenged the settlement amount on appeal. The employer’s contribution liability is limited to a percentage of $400,000, which the parties never disputed and which was approved by the circuit court. Accordingly, the employer has not been prejudiced by the assignment. Furthermore, in this case, invalidating the assignment to plaintiff actually frustrates the equitable sharing of damages. Although the majority states that the city paid less than its pro rata share, the fact remains that the city paid the entire amount required to settle the case, while the employer did not pay any part of the settlement amount. If the right of contribution is eliminated completely, the employer would receive the windfall because the employer would not contribute at all. In addition, assignment of the contribution action would not affect the employer’s liability under the Workers’ Compensation Act. This court has held that a settling tortfeasor may seek contribution from an employer in spite of the protection of the Workers’ Compensation Act. (Doyle v. Rhodes (1984), 101 Ill. 2d 1.) In Kotecki v. Cyclops Welding Corp. (1991), 146 Ill. 2d 155, this court held that a settling tortfeasor may not recover more in contribution from an employer than the employer’s statutory liability under the Workers’ Compensation Act. An assignor cannot assign any more than it possesses. (Collins Co. v. Carboline Co. (1988), 125 Ill. 2d 498, 512.) Thus, in pursuing the contribution action, plaintiff would be limited by Kotecki. Neither would assignment affect the workers’ compensation lien. When an employer pays workers’ compensation benefits to an employee, the employer acquires a lien against any award the employee receives from a third party. (Ill. Rev. Stat. 1979, ch. 48, par. 138.5(b).) In this case, the employer (or its insurer) paid benefits and therefore acquired a lien. After plaintiff received the settlement proceeds of $400,000, the circuit court ordered plaintiff to repay the employer the workers’ compensation benefits, minus statutory attorney fees, and the workers’ compensation lien has been satisfied. The employer (or its insurer) was totally reimbursed for the workers’ compensation benefits and has paid a net of $0. Thus, both policies underlying the Contribution Act support the assignment. Case law on the issue further supports assignment to plaintiff. In Puckett v. Empire Stove Co. (1989), 183 Ill. App. 3d 181, the plaintiff brought a personal injury action against several alleged tortfeasors. As in this case, one of the tortfeasors assigned a right of contribution to the plaintiff. The appellate court found that the plaintiff had a direct and immediate interest in the action. In addition, the plaintiff did not seek to promote "the litigation of another which otherwise might not be maintained.” (Puckett, 183 Ill. App. 3d at 191.) The appellate court concluded that the assignment to the plaintiff did not violate public policy but ultimately held that the assignment was invalid for a different reason. The appellate court, however, did not address the specific issue raised in this case. No other Illinois case has addressed the issue raised here. Other jurisdictions have considered whether a plaintiff may receive an assignment of a contribution claim to increase the plaintiff’s recovery. In Robarts v. Diaco (Fla. App. 1991), 581 So. 2d 911, the court considered this specific issue and held that assignment to the plaintiff does not violate public policy. The Florida contribution statute considered by the court is virtually identical to the Illinois statute. (See Fla. Stat. ch. 768.31(2)(b) (1989).) In upholding the assignment, the court stated: "We hold, therefore, that the assignment of the doctors’ rights of contribution in this case is not invalid merely because it was assigned to the original plaintiff in the tort action who may or may not have received full compensation for the injuries sustained by reason of the tort. If the assigning tortfeasor should choose to bestow a 'windfall’ upon the plaintiff by reason of such an assignment, that is a matter of contract between those parties. Such a plaintiff may, by way of such an assignment, ultimately recover more than what his full compensation for damages resulting from the tort alone would have been. However, that plaintiff cannot [citation] recover more from a nonsettling joint tortfeasor on the assignment than the assigning tortfeasor paid in excess of his pro rata share of liability for the tort. Neither can that plaintiff recover from a nonsettling joint tortfeasor more than that nonsettling joint tortfeasor’s pro rata share of the reasonable value of the entire liability.” Robarts, 581 So. 2d at 915. Similarly, in Bush v. Superior Court (1992), 10 Cal. App. 4th 1374, 13 Cal. Rptr. 2d 382, the court held that a tortfeasor could assign an equitable indemnity action to the plaintiff. The court held that the assignment did not violate public policy even though it might provide an additional recovery to the plaintiff. In California, equitable indemnity, like contribution, provided that one party may recover the proportionate share of liability from a nonsettling tortfeasor. In Bush, the court held that the assignment was valid because it encouraged settlement and because it did not require any defendant to pay more than his proportionate share of liability. The court recognized that the defendant was, in truth, seeking the windfall: "[T]he policy against excess recovery is primarily designed to prevent the imposition of a disproportionate burden on the protected tortfeasor. [Citation.] When one who is asked to bear no more than his or her proportionate share raises this shield he or she implicitly complains on behalf of another tortfeasor who has borne a disproportionate share. This prompts the rhetorical question: ' " 'What’s Hecuba to him or he to Hecuba, that he should weep for her?’ ” ’ ” Bush, 10 Cal. App. 4th at 1388, 13 Cal. Rptr. 2d at 390. See also Ogle v. Craig Taylor Equipment Co. (Alaska 1988), 761 P.2d 722 (allowing assignment of contribution action to the plaintiff without addressing whether this assignment violates public policy). In conclusion, the city did not act gratuitously; it made an economically rational decision. It realized that its liability, as determined at a trial, could exceed $400,000. As a matter of contract, the city agreed to assign the contribution action to plaintiff. The city freely bargained away its right of contribution in order to eliminate its tort liability to plaintiff. Plaintiff took the chance that she would receive little or nothing in the contribution action. There is no suggestion of collusion to increase the employer’s liability in this case. According to the majority, although plaintiff released all potential parties, no contribution claim ever arose. In effect, the employer received a windfall simply by refusing to settle. For the foregoing reasons, I would find the assignment of the contribution action valid. CHIEF JUSTICE BILANDIC and JUSTICE McMORROW join in this dissent.