General Liability Defense

Deliberate Counter Exception

Mark T. McAndrew — Mon, 23 Jan 2012 14:27:41 -0600

The plaintiff, Paul Swearingen, was a truck driver, who delivered a tanker full of chemicals to the defendant, Momentive Specialty Chemicals ww2.momentive.com/home.aspx. Swearingen parked in the unloading bay, and Momentive asked him to open the dome lid on the top of his truck. No one from Momentive was present to provide instructions to Swearingen. Swearingen admitted that his employer had trained him to retain three points of contact on the truck when opening the lid. He was aware that he was not wearing a safety harness, and that there was a low, exposed fire suppression system pipe. Nevertheless, Swearingen climbed on top of the truck stood up, hit is head on the pipe, fell and was injured.

Swearingen’s complaint alleged that Momentive breached its duty by failing to warn him of the risk associated with the pipe and by failing to provide him with a fall protection harness. Generally, a landowner owes a business invitee “the duty of exercising ordinary and reasonable care to see that the premises are reasonably safe.” Momentive’s motion for summary judgment was granted after it had argued that the hazard was “open and obvious” and that Momentive had no duty to Swearingen.

On appeal, Swearingen argued in response to the “open and obvious” condition that the “deliberate encounter exception” should have been applied. The 7^th Circuit disagreed and affirmed the district court decision. Swearingen v. Momentive Specialty Chemicals Inc., No. 11-2088 (Dec. 7, 2011). "Under that exception, even if an invitee harms himself on an open and obvious hazard, the landowner may still be liable if he had reason to expect that the invitee would deliberately encounter the hazard because the advantages of doing so outweigh the apparent risk to a reasonable person." The court explained, here, Swearingen had been trained by his employer in the correct way to open the lid; however, he did not open it correctly. Overall, there was no evidence that Momentive had reason to expect that Swearingen would have climbed up to deliberately encounter the pipe in such a way. The court concluded, under Illinois law, that Momentive did not have a duty because the injury was neither foreseeable nor likely, and the burden on the defendant to guard against the injury would be substantial.

"Alternative Liability" Doctrine

Mark T. McAndrew — Mon, 16 Jan 2012 10:43:58 -0600

Passengers in a minivan were injured in a two-car collision. The passengers sued both drivers of the vehicles. The jury found no negligence on the part of both drivers. The judge granted the passengers’ motion for retrial concluding “the jury’s finding…is unreasonable and against the manifest weight of evidence…” The defendants appealed the order for retrial. The Appellate Court, 1^st District reversed because “the jury could have found that the passengers failed to prove by a preponderance of the evidence that the drivers were negligent.” The verdicts were also not legally inconsistent or against the manifest weight of evidence. Anderson v.Anderson, 2011 IL App (1st) 110034 (Sep. 30, 2011).

The court stated since this case involved plaintiffs suing multiple potential tortfeasers, the burdens of proof between innocent, injured parties must be discussed. This raises the “doctrine of alternative liability,” which the Illinois Supreme Court has adopted. Smith v. Eli Lilly & Co., 137 lll.2d 222 (1990). Alternative liability may apply when two or more defendants act tortiously toward a plaintiff who, through no fault of her own, cannot identify which one of the joint defendants cause the injury. The burden of proof then shifts to each defendant to prove his innocence with respect to causation. However, the innocent plaintiff still must prove that each tortfeasor was negligent before the burden will shift. Wyscocki v. Reed, 222 Ill. App. 3d 268 (1991).

Here, because the jury did not find negligence on the part of the drivers and because the jury could have found that that the plaintiffs failed to prove the negligence of both defendants, the use of the doctrine of alternative liability was unavailable.

Sole Negligence Exclusions

Mark T. McAndrew — Tue, 10 Jan 2012 11:21:50 -0600

Walsh Construction was the general contractor for an Illinois water reclamation district construction project. Luise, Inc. was a subcontractor of Walsh. Walsh requested coverage as an additional insured under Luise’s liability insurance policy, which was purchased from Scottsdale Insurance Company. The language for the additional insured provision excluded coverage for accidents “arising out of the sole negligence of the additional insured.” A Walsh employee backed a bulldozer into Luise’s dump truck. The employee driving the truck sued Walsh and the water district but later dropped the water district from its claim. Scottsdale sued for declaratory judgment in federal district court arguing that there was no duty to defend Walsh because of the sole negligence exclusion. Subsequently, Walsh filed a third party complaint for contribution against Luise. The district court granted summary judgment against Walsh, concluding that Scottsdale was not obligated to defend Walsh. Scottsdale Ins. Co. v. Walsh Const. Co., No. 10 C 1565 (Sept. 29, 2011).

Walsh argued that the sole negligence exclusion did not apply because both drivers may have been negligent. Walsh further argued that the employee’s complaint initially included the water district as well. The court stated there is no case law to substantiate an inference that Walsh is not solely negligent just because the water district at one time was named as a defendant. the court further explained that Walsh’s theories cannot be supported by the employee’s complaint if the complaint does not allege any supporting facts and would cause the court to speculate regarding certain facts as to how the accident occurred. A court will not read into the complaint facts that are not there. Here, the facts alleged in the complaint were outside the bounds of the policy coverage.

Walsh also relied on their third-party complaint and testimonial evidence, and argued under Pekin Insurance Company v. Wilson that the Illinois Supreme Court considered a third-party complaint where the insurance policy contained an exception to coverage exclusion provision. 237 Ill.2d 446 (2010). Here, however, there was no such exception. The district court further went on to say that in L.J. Dodd Construction Company v. Federated Mutual Insurance the court held that a trial court may not look to a third-party complaint absent some unusual or compelling circumstance. Similarly, in National Fire Insurance v. Walsh Construction Company, the court applied the same rule in finding that the facts alleged in the complaint fell squarely into the sole negligence exclusion. 392 Ill. App. 3d 312 (Ill. App. Ct., 1st Dist. 2009) (citing American Economy Ins. Co., v. DePaul University, 383 Ill. App. 3d 172 (2008)) (declining to allow an additional insured to bolster its claim of coverage by referencing its own third-party claim). Here too, Walsh’s testimonial evidence is not entitled to an exception and the complaint is sufficient to find Scottsdale had no duty to defend.

Walking Outside the Crosswalk

Mark T. McAndrew — Wed, 28 Dec 2011 09:32:11 -0600

While crossing a Chicago street, Beverly Longo strayed outside the crosswalk and was hit by a Chicago Transit Authority (CTA) bus. She claimed that she could not cross within the crosswalk because there were other pedestrians and a bicyclist who was making deliveries for a local sandwich shop. She claimed the bike was also in the crosswalk. Longo filed suit against the CTA.

During summary judgment proceedings, the court concluded that there was no evidence of negligence. Summary judgment was granted in favor of the CTA. Longo appealed.

The appellate court affirmed but on grounds that there was a lack of duty owed to Longo. Amanda Jimolka v. Chicago Transit Authority, et al., No. 1-10-2894 (2011). Under Illinois Law, pedestrians traveling on a public roadway, outside of the crosswalk are neither intended or permitted users and thus are owed no duty of care. Streets are used for vehicles not pedestrians. It was undisputed that Longo collided with the lower, right hand corner of the bus near a manhole that was more than 9 feet outside of the crosswalk. Under Illinois law, it was Longo who should have yielded to the traffic when she walked outside of the crosswalk.

Exculpatory Agreements and Charitable Organizations

Mark T. McAndrew — Mon, 21 Nov 2011 10:53:44 -0600

Plaintiff, Andre Johnson, voluntarily enrolled as a beneficiary in defendant, Salvation Army’s, adult rehabilitation program. The treatment program included assigned job responsibilities. During the program, Johnson was injured in a car crash while a passenger in a Salvation Army owned vehicle being driven by a Salvation Army employee. Johnson filed a negligence claim. The Salvation Army filed an affirmative defense alleging that Johnson’s claims were barred because he signed an exculpatory agreement. Ultimately, the circuit court decided that the exculpatory clause in the beneficiary’s admittance statement was a complete bar to Johnson’s claims.

The appellate court agreed. Johnson v. Salvation Army, 2011 IL App (1^st) 103323. Johnson argued that the exculpatory clause was against public policy in that his relationship with the defendant was akin to an employee/employer. While exculpatory agreements are generally contrary to public policy if between an employer and employee, the court disagreed with Johnson and concluded that the relationship was that of a beneficiary and charitable organization. The work therapy and training during rehabilitation was part of the rehabilitation process and gave the beneficiaries a sense of self worth. The beneficiaries were not paid for their work. The admittance statement Johnson signed even stated that “I am a beneficiary and not an employee of this center.”

Johnson also argued that the disparity in bargaining power between him and defendant rendered the exculpatory clause unenforceable. He argued that he had no free choice or reasonable alternative in bargaining with the defendant over the enrollment conditions and that he had no free choice but to accept the terms or be denied food and shelter. However, the court held that the food and shelter offered by the defendant were merely incident to the rehab program and that the defendant could have sought rehabilitation services elsewhere

Open and Obvious Stairwell

Mark T. McAndrew — Fri, 18 Nov 2011 10:09:37 -0600

On November 8, 2004, plaintiff, Donald Van Gelderen, was at defendant, David Hokin’s home, installing automated window coverings. As Van Gelderen was leaving the house, he fell down a flight of stairs inches away from the front door, and was injured. A jury found the stairs were an unreasonably dangerous condition. The jury found that Van Gelderen was 50% contributorily negligent, reducing the final award to about 1.5 million. Defendant filed a motion for judgment notwithstanding the verdict. The motion was denied, and the defendant appealed.

The appellate court affirmed. Van Gelderen v. Hokin, 2011 IL App (1st) 093152. The court distinguished the case of Alcorn v. Stepzinski. 185 Ill. App. 3d 1 (1989). The court in Alcorn held that while all stairs present some risk of harm, the risk of harm must be shown to be unreasonable to give rise to a duty of care. The configuration of a stairway may be dangerous only if the stairway configuration masks or obscures the stairs in a way which prevents the invitee from becoming aware of the open and obvious configuration. The appellate court, here, concluded that the Alcorn court’s decision heavily relied on the plaintiff’s failure to present expert testimony.

Hokin argued that there was no evidence that the stairwell was improperly designed, masked, or obscured. However, the court said the Van Gelderen did present expert testimony that the stairwell was unreasonably dangerous. The court held that this evidence was sufficient to support the jury findings. The defendant also argued that the stairwell was an open and obvious condition. However, the appellate court concluded that the evidence fell short of establishing the condition was open and obvious as a matter of law.

A condition presents an open and obvious danger to the extent the risk is apparent to, and is appreciated by a reasonable person in the person’s exercise of ordinary perception, intelligence and judgment. Plaintiff’s testimony that he did not see the condition presented a question of fact, precluding the court from finding an open and obvious condition.

Blogging Jurors

Mark T. McAndrew — Wed, 09 Nov 2011 09:48:30 -0600

The estate of Scott Eskew filed a negligence claim against defendants, Burlington Northern Santa Fe Railway Company (BNSF) and Metra, after Scott was killed by a Metra train. In 2009, a Cook County Circuit Court jury returned a 5 million dollar verdict to the plaintiff. Among various post-trial motions filed by Metra and BNSF, the defendants filed a motion for an evidentiary hearing on juror misconduct in regards to a juror who maintained a blog during trial. Cook County Circuit Court Judge Donald J. Suriano denied the motion. The defendants appealed.

Justice Hoffman of the Illinois Appellate Court, 1^st District, upheld the trial court’s ruling. Eskew, et al., v. BNSF, et al., 2011 IL App (1^st) 093450. In Illinois, to compel a post-trial evidentiary hearing on juror misconduct, the moving party must produce specific, detailed evidence. People v. Kuntu, 188 Ill. 2d 157, 161 (1999). A verdict may be challenged by showing the existence of improper extraneous information. Redmond v. Socha, 216 Ill. 2d 622, 636 (2005).

The appellate court held that the trial court correctly observed that the defendants had not produced any evidence showing that the jurors were exposed to improper extraneous information bearing on the crucial issues in the case. Further, the blog entries did not indicate that any information was received either from the juror’s husband or from any other source.

The court cited to People v. Runge in regards to the defense’s argument about premature deliberations. 234 Ill. 2d 68 (2009). Although premature deliberations are not proper, they may not be so serious as to warrant a new trial. “The important question is not whether the jurors kept silent with each other, but whether each juror kept an open mind…” Here, the court concluded that the blog’s content was not biased. In fact, the blog indicated that jurors were committed to keeping an open mind and were “guarding their objectivity fiercely until the last syllable of testimony [had] been uttered…”

You can find the juror’s blog entries at http://greenroomthoughts.blogspot.com/search/label/justice

30 Day Removal in Federal Court

Mark T. McAndrew — Mon, 10 Oct 2011 11:38:58 -0600

According to 28 USC §1446(b), a defendant has 30 days from the service of summons to remove the case to federal court. The case cannot be removed unless all the defendants consent to removal. However, Section 1446 does not address whether a later served-defendant in a multiple defendant case can obtain consent for removal from any previously served defendant whose 30 day time limit has expired. So the question becomes, when does the 30 day countdown start running? Some courts have adopted the “first-served defendant” rule, where notice of removal must be filed within 30 days of service on the first-served defendant. However, courts are split on the issue.

In Seabright Insurance Company v. JLG Industries, No. 11 C 2424 (June 20, 2011, N.D. Ill.) , Seabright, the later-served defendant filed a notice of removal 33 days after the first defendant was served. U.S. District Judge Kennelly adopted the “later-served defendant” rule. Applying the rule to the case, the court held that even if the first-served defendant was 3 days past the 30 day deadline, the later served defendant is able to file a notice of removal within its own 30 day window with the consent of all the defendants.

The court stated that the “later-served defendant” rule more appropriately effectuates Section 1446, which uses the phrase “….shall be filed within 30 days after the receipt by the defendant.” The court reasoned that this language allows each defendant, on a defendant-by-defendant basis, to remove an action from state to federal court regardless of what the earlier served defendant did. The court explained, if the “first-served defendant” rule is used, a later-served defendant might be deprived of the ability to remove the case, which is contrary to the language of Section 1446.

The plaintiff argued that the “later-served defendant” rule gives the first-served defendant, whose 30 day deadline expired, another bite at the apple. The court disagreed. The first-served defendant only has the ability to consent after its time has expired because of the unanimity requirement, not the ability to remove the case. More so, if the “first-served defendant” rule was used, a plaintiff would be able to preclude removal to federal court by manipulating the timing of service on each defendant. Lastly, dockets are often updated slowly. Defendants not yet served would either be unaware of any previous service of summons or be forced to track down earlier served defendants in order to get a sense of timing.

The Power of Supreme Court Rule 237

Mark T. McAndrew — Mon, 03 Oct 2011 07:49:40 -0600

The Illinois Appellate Court for the First District, Third Division, has affirmed a ruling by Judge Laurence J. Dunford of the Cook County Circuit Court. In Interstate Bankers Casualty Company a/s/o Michael Porter v. Waites,No. 1-10-2963, July 27, 2011, the plaintiff, Interstate Bankers Casualty Company , brought a property damage action against defendant, Waites. Interstate filed a Rule 237 motion, which required Waites’ appearance at the arbitration hearing. The day before the hearing Waites filed an emergency motion to admit negligence and to be excused from appearing at arbitration. The plaintiff objected.

The circuit court denied the motion. The judge reasoned it was “standard practice” because “when a plaintiff…[objects] to the admission of negligence..., I deny the motion...” Rule 237 creates a duty upon the party to appear. The next day, Waites never appeared at the arbitration hearing. The arbitrator awarded Interstate $3,912. Waites rejected the award. However, the circuit court granted Interstate’s motion to debar Waites’ rejection of the award. Waites appealed.

The appellate court stated that, despite the circuit court’s seemingly arbitrary rationale, its conclusion was correct. Illinois Supreme Court Rule 90(g) provides that a party’s presence at an arbitration hearing may be excused by “court order for good cause shown not less than seven days prior to hearing.” In this case, the defense counsel knew about the hearing two months in advance, filed the motion the day before, and admitted not having communicated with the client. Furthermore, Waites provided no extenuating reason for excusal or for the delay, and violated Rule 237 by not attending the hearing. Therefore, Waites did not comply with Rule 90(g).

The court also affirmed the circuit court’s order that debarred Waites from rejecting the arbitration award. Rule 90(g) provides that a party whose absence is not waived by stipulation or excused by the trial court may be debarred from rejecting the award. Even though Waites’ attorney was present at the arbitration hearing, Waites’ failure to show violated Rule 237. Further, she did not communicate with counsel and did not provide any extenuating reasons for her unexcused absence. The appellate court said that the sanction was appropriate under the circumstances.

Brokers as Agents of Insurance Companies

Mark T. McAndrew — Mon, 26 Sep 2011 08:33:17 -0600

While driving his own car on his way to visit a customer, Michael Molda, a Metro Lift employee, was involved in a car accident with Ms. Nola Wilson. Molda had his own auto insurance but as an employee of Metrolift, he was also covered under Metrolift’s insurance policy with the plaintiff, First Chicago Insurance www.firstchicagoinsurance.com/. Metrolift purchased the insurance policy through Associated Specialty Insurance (Associated). Mark Baskiewicz, an insurance broker of 20 years and an employee of Associated, was Metrolift’s primary contact for insurance issues. Metrolift notified Mark Baskiewicz two days after the accident and both allegedly agreed to a plan in which they would “wait and see” if any complaints were filed against Metro and if Molda had sufficient insurance under his policy.

Wilson sued Molda in August 2007. Metrolift was later added as a defendant. Metrolift forwarded the amended complaint to First Chicago. First Chicago then filed for declaratory judgment and alleged it was not liable to provide insurance to Molda or Metrolift because of unreasonably late notice it only first received in March 2008. First Chicago filed for summary judgment and the motion was granted. Wilson and Molda appealed. (Metrolift was later dismissed from the Wilson’s tort case on statute of limitations ground and did not participate in the appeal).

The appellants argued that First Chicago was barred in claiming that notice was untimely because the conversation between Baskiewicz and Metrolift constituted “prompt” notice to First Chicago’s “authorized representative” per the notice provision of the insurance contract. The court stated that an insurance broker is generally considered to be the agent of the insured and not the insurance company. State Security Insurance Co. v. Burgos, 145 Ill. 2d 423, 431 (1991). However, a broker may have apparent authority to provide notice if a reasonable person would believe that the broker was an agent. Id. at 431.

Apparent authority can manifest itself through course of dealings between the broker and insurance company, if a broker is continually used as an intermediary and conduit for premium payments and policy updates, and through the language of the contract such as a designated “representative” or “agent” clauses. See Id. at 423. The court found this case similar to the facts in Burgos and held that there could be apparent authority, which would make summary judgment improper. Furthermore, because there was a question of fact as to what was discussed between Metro and Baskiewicz and whether First Chicago suffered any prejudice from the late notice, the court could not determine if the delay was unreasonable.

Animal Control- Running at Large Act

Mark T. McAndrew — Mon, 19 Sep 2011 14:55:17 -0600

Keith Allendorf was an employee of Mr. and Mrs. Clifford Redfearn. He also lived on their farm. On August 15, 2008 the Redfearn's bull escaped and ran loose. The Redfearns asked for Keith's assistance to retrieve the bull and equipped him with the their ATV to facilitate the search. While in the process of pursuing the bull, Keith was injured when he struck a tree stump. As a result, he broke several ribs.

Mr. Allendor filed suit and alleged in his complaint that the defendants violated the Running at Large Act, in that the bull was the proximate cause of injury and that the bull was improperly restrained. Count II of the complaint was for common law negligence. The defendants filed a motion to dismiss arguing the ATV accident was not in the scope of harm addressed by the Running at Large Act. The defendants also argued that the ATV statute in the Illinois Motor Vehicle code exempts property owners from negligence for ATV accidents occurring on their property. The motion to dismiss was denied and the trial court certified two questions to the Illinois Appellate Court.

First, the trial court asked if the ATV statute barred the plaintiff’s negligence claim. The appellate court held that it did not because the statute exempts “owner[s] lessee[s], or occupant[s] from the negligence claims of “others.” 625 ILCS 5/11-1427(g). Mr. Allendorf not fall within the meaning of “others” and was more like an owner, occupier, or agent because he resided on the property and was an employee of the defendant. In addition the Court looked at the fact that he was driving the ATV with permission in exchange for valuable consideration and as such fell within another exception to the statute.

The second certified question asked if the plaintiff could bring a claim under the Running at Large Act. The appellate court held that the plaintiff could not and held the trial court’s denial of the motion to dismiss was proper. “All owners” of livestock shall refrain and prevent livestock from running at large and “shall be liable for all damages occasioned by such animals running at large.” 510 ILCS 55/1. The court concluded that the plaintiff status was within the scope of “owner” because the plaintiff stood in a special relationship to the animal as an employee of the farm and because the plaintiff was attempting to exercise dominion and control over the bull at the time of the accident.
The court ruled that the plaintiff's relationship with the animal would put him on notice of the dangers of this animal and thus he could not recover under the statute.

Allendorf v. Redfearn, 2011 WL 3105714

Relation Back 735 ILCS 5/2-616(d)

Mark T. McAndrew — Mon, 12 Sep 2011 13:31:02 -0600

Jerry Maggie, a 46 year old bricklayer died after a fall while working at a construction project. Maggie v. RAS Development, 949 N.E.2d 731 (Ill. App. 1st 2011). His estate brought a negligence lawsuit against RAS Wolfgram, one of the entities named in the complaint. Wolfgram’s answer volunteered that it was the general contractor (GC). However, a year later Wolfgram stated in an interrogatory answer that it actually hired RAS Development as the GC.

After the contract between RAS Wolfgram and RAS Development surfaced 4 years after the accident and outside of the limitation period, the plaintiff voluntarily dismissed RAS Wolfgram and added RAS Development as the general contractor to the complaint. The case proceeded to trial, and the jury returned a $3.2 million dollar verdict againt RAS Development. RAS Development appealed and argued that trail court erred in denying its motion to dismiss on the grounds that the amended complaint was beyond the statute of limitations and that it did not relate back to the original complaint.

The First District Illinois Appellate Court affirmed and held that the relation back doctrine applied. In a case of misnomer or mistaken identity, the relation back doctrine would automatically apply. Relation back depends on what the added party knew or should have known, not on the amending party’s knowledge or its timeliness. Citing Krupskie v. Costa Crociere, 130 S. Ct. 2485 (2010). If a complaint intends to sue a liable party not named, and the unnamed party knows or should know that it was not named because of the plaintiff’s misunderstanding, then it is case of mistaken identity. Here, like Krupskie, the complaint intended to sue the entities that “owned or were in charge of the erection, construction, repairs, alteration, removal and/or brick laying…,” and RAS Development knew or should have known of the plaintiff’s mistake.

Once mistaken identity is established, a complaint amended outside the statute of limitations relates back if three conditions are met. The court found all three satisfied. First, the court found the original complaint was filed within the applicable limitation period. Second, the amended complaint grew out of the same occurrence stated in the original complaint. Third, the court held that RAS Development received timely notice of the commencement of the action. It was aware at least 15 months prior to the expiration of the limitations period that the plaintiff intended to sue the general contactor and was, therefore, not prejudiced in maintaining its defense.

When Does Interest Run on Remittitur

Mark T. McAndrew — Mon, 05 Sep 2011 07:52:09 -0600

In the case of Thompson v. Memorial Hosp. of Carbondale, 2011 WL 1642594S.D.Ill. (2011), the question presented to the Appellate Court was - When does post-judgment interest start to run once remittitur has been ordered and the plaintiff accepts the proposed reduction? In this case, the remittitur lowered the original verdict of $500,000 to $250,000. The defendant hospital argued that post-conviction interest should begin to accrue at the time of the remittitur and not from the original judgment date.

The court disagreed and distinguished cases where a first judgment is vacated and remanded because the original judgment lacked an evidentiary or legal basis. Coredero v. De Jesus-Mendez, 922 F. 2d 11, 16 (1st Cir. 1990). In these types of cases, because damages have not been originally ascertained in a meaningful way, post-judgment interest accrues from the date of the second judgment. Id. However if the original judgment is basically legally sound but merely modified on remand, post-interest judgment accrues from the date of the original first judgment. Id.

The court further explained that in cases in which a remittitur of damages had been ordered the rule is: “Where damages were sufficiently ascertained at the time of the district court judgment and a remittitur order only merely reduced the damages by a distinct amount easily determined from the facts of the case, post-judgment interest accrues from the date of the district court’s original judgment, rather than from the date the plaintiff consents to remittitur.” Coal Res., Inc. v. Gulf & W. Indus., Inc., 954 F.2d 1263 (6^th Cir.1992).

In this case, the Seventh Circuit found that the jury’s judgment in favor of Thompson was basically sound and supported by the evidence but was excessive under the facts. It was also not in line with awards in similar cases. Therefore, because there was only a reduction in damages, the district held that post-judgment interest ran from the date of the original judgment.

Inventory Records as Proof in Employee Theft Policy

Mark T. McAndrew — Mon, 29 Aug 2011 12:37:45 -0600

U.S. District Judge Marvin E. Aspen denied the defendant’s, Federal Insurance Company, motion for summary judgment. Coleman Cable, Inc. v. Travlers Indem. Co., No 08-cv-5687 (May 13, 2011). The plaintiff, Coleman Cable,www.colemancable.com claimed that 904,470 pounds of copper wire was stolen from its Florida production plant. Federal’s policy covered direct loss of …property….resulting from theft…committed by an employee acting alone or in collusion with others. The policy also contained an inventory-shortage exclusion, which attempted to limit the use of inventory-record comparison to prove the scope of loss. The provision read, “a comparison between its inventory records and actual physical count of its inventory to prove the amount of loss, only where it established wholly apart from such comparison that it has sustained a covered loss caused by an ‘identified’ employee.”

Federal did not dispute that copper wire was stolen in 2005. Coleman argued that the surveillance footage of one successful theft and two attempted thefts showed there was employee involvement. More so, the inventory-record comparison proved that there were multiple thefts totaling over 2 million dollars. However, Federal argued that the footage did not prove a scheme involving an employee and even if it did, Coleman did not “identify” an employee.

On the issue of employee involvement, the district court disagreed with Federal. The court explained that “the evidence….must fairly and reasonably exclude any other explanation.” Gaytime Frock Co. v. Liberty Mutual Ins. Co., 148 F. 2d 694 (7^th Cir 1945). However, here, in this case, the burden of proof is much less stringent at the summary judgment phase as compared to the burden used at Gaytime’s bench trial. Gillette Co. v. Travelers Indem. Co., 365 F.2d 7 (7^th Cir. 1966). Furthermore, recent cases tend to allow an inference of employee dishonesty to be drawn from relatively thin circumstantial evidence and then to permit the full extent of losses to be proved by inventory comparison. Fidelity and Deposit, Co. v. So. Util., 726 F.2d 692 (5^th Cir. 1984); see also Blitz Corp., v. Hanover Ins., 1996 WL 308233 (N.D. Ill). The court concluded that the surveillance evidence offered sufficient evidence for a reasonable jury to conclude there was an employee theft scheme.

Finally, Federal argued that the phrase “identified employee” in the inventory-shortage exclusion meant that Coleman must identify a specific employee. The court disagreed and found that “identified employee” was ambiguous and subject to multiple interpretations. For instance, the surveillance video could have been used to identify an individual as ‘an’ employee. Thus, the phrase was not narrowly construed to mean a specifically ‘named’ employee. The court held that Coleman sufficiently demonstrated theft by an identified employee and that Coleman could use the inventory-record comparison to establish the amount and price of the lost copper.

Prejudice Needed to Dismiss Traffic Cases

Mark T. McAndrew — Sun, 21 Aug 2011 08:48:38 -0600

Previously, the Illinois Appellate Court, pursuant to Supreme Court Rule 504, approved the practice of dismissing traffic cases if the arresting officer failed to schedule the initial court appearance within the 14 to 60 day window and Prosecutors failed to present evidence that complying with this deadline was impractical. Defendants, James Ziobro, Michael Lemoine and Todd Wambsganss were each issued a citation for driving under the influence but their first appearance date listed in the citation was beyond the period prescribed by Supreme Court Rule 504. Each of the defendants’ attorneys’ filed Motions to Dismiss due to the violation of Rule 504. In each case, the charges were dismissed and the State was barred from refilling. The Appellate Court, in a consolidated Appeal, affirmed the dismissals holding that the Circuit Court did not abuse its discretion because “the State did not present any evidence that it was impracticable to comply with Supreme Court Rule 504’s time limitations. People v. Ziobro, 397 Ill.App.3d 831, 838-839. Leave for Appeal to the Illinois Supreme Court was allowed.

The Supreme Court held that Rule 504 is “directory” and not “mandatory” in that “no specific consequence is triggered by the failure to comply with the Rule.” As such, once Rule 504 is violated, dismissal is not necessary or automatic. The Court held that even though the Circuit Court had direct discretion to dismiss all the consolidated cases due to Rule 504 violations, the Court abused its discretion in failing to require a showing of prejudice to the defendants which would affect their due process rights. This new “Public Act 96-694” affirmatively prohibits Circuit Courts from dismissing DUI charges for a violation of either Rule 504 or Rule 505. The new law retroactively applies to ongoing cases.

Hearsay Evidence- State of Mind Exception

Mark T. McAndrew — Mon, 15 Aug 2011 06:59:18 -0600

The Illinois Appellate Court has affirmed a judgment by Cook County Circuit Judge Daniel M . Lacallo. In Heather Guski v. Asim Raja, et al, the plaintiff, Heather Guski, brought a wrongful death claim against Dr.Asim Raja, the doctor who treated Guski’s father Gerald Parkison before he died. Parkison was seen by Dr. Raja in December 1999 when he went to an emergency room after he experienced headaches, vomiting, dizziness and body aches. Parkison was diagnosed with an upper respiratory infection, was prescribed antibiotics, and sent home with instructions. Four days later, Parkison was found dead in his home.

The plaintiff’s theory was that Dr. Raja failed to take an adequate medical history and failed to order a CT scan. This test would have detected bleeding on the brain. The plaintiff’s and the defendant’s medical experts concluded with no real consensus and as to what exactly caused the death. As a result, the circuit court granted the defendant’s partial directed verdict as to whether Raja took an adequate history. The jury found for the defendants. The plaintiffs appealed and claimed the circuit court erred in their rulings on several motions in limine.

The defendants had moved to exclude hearsay statements by Parkinson made to his son and ex wife about his headaches. The plaintiff claimed on appeal that she sought to use the hearsay statement to prove that Parkison suffered severe headaches. ( Hearsay statements are out of court statements offered to prove the truth of the matter asserted and are generally inadmissible unless they fall within certain exceptions. ) The plaintiff argued that this testimony was an exception because it was evidence of Parkison’s state of mind before going to the hospital. A hearsay statement admitted under the state-of-mind exception may only be used for the limited purpose permitted by the exception, not for its own truth. People v. Munoz, 398 Ill. App. 3d 455, 482 (2010). The court did not buy this argument and felt that the plaintiff was seeking “to use the content of the hearsay statement to prove its truth which is precisely what the hearsay rule seeks to prevent.” The appellate court affirmed the jury verdict and stated that the jury simply believed the defendant’s experts over the plaintiffs.

Right to Control and Vicarious Liability

Mark T. McAndrew — Mon, 08 Aug 2011 10:13:26 -0600

On the morning of April 1, 2004, DeAn Henry was delivering a load of potatoes for C.H. Robinson (CHR) www.chrobinson.com/. CHR is a logistics company that offers transportation services to customers needing to transport goods. Henry was involved in a multiple car accident Near Plainfield on Interstate 55 that resulted in the deaths of Joseph Sperl and Thomas Sanders. Henry owned the tractor she was driving and leased it to a company called Dragonfly.

The plaintiffs sued Henry, Dragonfly and CHR for wrongful death and personal injuries. CHR denied being vicariously liable and claimed that Dragonfly and Henry were acting as independent contractors per their contract. The circuit court denied CHR’s motion for a judgment n.o.v., which argued that the evidence did not support the jury’s $24 million dollar verdict against CHR that found a principal-agent relationship existed between CHR and Henry. CHR appealed.

The appellate court affirmed. The court stated the label of an “independent contractor” found in a contract is not determinative of employment status. Roberson v. Ind. Comm’n, 225 Ill. 2d 159 (2007). Although no single factor is determinative, an important factor that weighs in the favor of an agency relationship is the right to control. Here, the court concluded that CHR owned the transported product and directed Henry’s conduct during the entire truck trip. CHR enforced extensive special instructions given to Henry about her load, communication, and strict travel schedule, and even imposed a system of fines if Henry did not comply.

Another important factor is the nature of work performed in the relation to the general business of the defendant. Ware v. Ind. Comm’n, 318 Ill. App. 3d 1117, 1122 (2000). Here, the court found that the nature of CHR’s transportation business was directly related to, if not the same as Henry’s work as a truck driver Thus the trial court properly permitted the jury to decide the case and interpret the inferences to be drawn based upon the evidence.

Sperl v. C.H. Robinson Worldwide Inc., 408 Ill.App.3d 1051

Product Liability / Open and Obvious Defense

Mark T. McAndrew — Mon, 11 Apr 2011 10:06:41 -0600

In the case of Salerno v Innovative Surveillance Technology Inc., the plaintiff, an investigator in the narcotics technical field operations unit of the Cook County state's attorney office, filed suit against the manufacturer of the van in which the plaintiff was working. The van contained a variety of surveillance equipment, to include a video periscope system. The plaintiff tried to stand up in the van andd struck his head on the periscope. The defendant file a motion for summary judgment arguing the persicope was open and obvious. The trial court agreed and granted the motion.

The Appeals Court said that the trial court erred in dismissing the case solely on the open and obvious doctrine. The plaintiff argued that the ruling was incorrect because of the of the "distraction" and "deliberate encounter" exceptions. The court dismissed this argument as the Supreme Court had previously ruled that these exceptions only applied to premises liability cases and had "no basis whatsoever" in products liability cases. The appeals court explained that Illinois courts have expressly rejected the notion that a products's open and obvious risk of harm is an absolute defense to a defective design theory of strict liability.

The Appeals Court further explained that the plaintiff waived his negligent design defect claim on appeal when in his reply brief when he conceded "there [is] nothing to criticize in [IST's] design [of the IST-6000 van]." This constituted a waiver of his negligence claim just as it did with respect to his strict liability claim. As there was no evidence to support his negligence claim, summary judgment was proper.

Forum Non Conveniens

Mark T. McAndrew — Sat, 02 Apr 2011 17:08:08 -0600

In the case of Bruce v. Atadero, the estate of Michael Bruce filed wrongful death and survival claims against Dr. Arsenio Atadero and Sherman Hospital alleging that they failed to diagnose Mr. Bruce's deep-vein thrombosis which resulted in his death in March of 2004 while he was a patient at Sherman Hospital in McHenry County www.shermanhealth.com. Bruce was a resident of Kane County and Dr. Atadero was a resident of, and maintained an office in, McHenry County.

The plaintiff voluntarily dismissed the case after it had been pending in McHenry County for almost 2 years. It was refiled in Cook County and the defendants moved to transfer the case back to McHenry County under the doctrine of forum non conveniens. Judge Elizabeth Budzinski denied the motion and defendants appealed. In their appeal defendants argued that plaintiff's choice of Cook County was entitled to less deference because the plaintiff did not reside there, the accident occurred in McHenry and the public and private interest factors favored the transfer to McHenry. They also argued that the trial court gave undue weight to the fact that Sherman Hospital operates two physical therapy facilities in Cook County and therefore was a resident of Cook County.

The Appellate Court agreed. "...all of the treatment on which plaintiff's complaint is based occurred at Sherman Hospital's facility in McHenry County and at Dr. Atadero's office in McHenry County." It further explained that the private interest factors clearly weighed in favor of the defendants because most of the potential witnesses were in McHenry County. In addition, the public interest factors favored McHenry as the county had a public interest in the medical care provided at one of its facilities and McHenry County's court docket is much less congested than Cook County. As such the trial court was directed to transfer the case to McHenry County

Public Adjuster's Lien

Mark T. McAndrew — Sat, 26 Mar 2011 10:36:00 -0600

Chapter 770 of the Illinois Compiled Statutes creates lien rights for numerous professions such as attorneys and doctors but does it also provide these rights to other professions such as Public Adjusters? This was the issue that the Illinois Appellate Court, 5th District, had to address in the case of Golub and Associates v. State Farm Fire and Casualty.

After a fire destroyed her home, Rosalind Clayton retained the plaintiff, a public insurance adjuster, to assist her in handling the claim. The plaintiff notified State Farm of his lien and his contract with Ms. Clayton and asked that his name be included on payments made to Ms. Clayton. The plaintiff handled the claim for Ms. Clayton and negotiated a settlement with State Farm. Shortly after the settlement was reached, Clatyon fired the plaintiff. Initially State Farm( www.statefarm.com) issued a check to both Clayton and the plaintiff. But Clayton then contacted State Farm and requested that the check be reissued in her name only. As a result, plaintiff filed suit. The trial court granted summary judgment in favor of the plaintiff.

The Appellate Court affirmed. The Court pointed out that Chapter 770 is not meant to be comprehensive and nowhere in the statute does it state that only certain profession's liens are the only liens to be recognized. "No one should be expected to work in a profession that would allow clients to fire the professional after the professional services were rendered unless there is an avenue to ensure payment."