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MILLER v. AFFILIATED FINANCIAL CORP.

December 27, 1985

WAYNE M. MILLER, ET AL., PLAINTIFFS,
v.
AFFILIATED FINANCIAL CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

Wayne Miller and his mother Eunice (collectively "Millers") have filed a multi-count Amended Complaint against Affiliated Financial Corporation and Stephen, Jack and JoAnne Smith (collectively "Affiliated-Smiths"), asserting a laundry list of fraud-based claims together with two claims alleging a lesser degree of culpability. In turn Affiliated-Smiths filed a Third Party Complaint against their former lawyers, Reno, Zahm, Folgate, Lindberg & Powell ("Reno Zahm"), seeking both indemnification (Third Party Complaint Count I) and contribution (Third Party Complaint Count II). Reno Zahm responded with:

    1. a motion to dismiss indemnification Count I in
  its entirety;
    2. a motion to dismiss contribution Count II as to
  Affiliated-Smiths' claims grounded in (a) the
  Racketeer Influenced and Corrupt Organizations Act
  ("RICO"), 18 U.S.C. § 1961-1968, and (b) Illinois
  common-law fraud; and
    3. a Fourth Party Complaint against Metropolitan
  Life Insurance Company ("Metropolitan"), seeking
  contribution if Reno Zahm are held liable to
  Affiliated-Smiths for contribution.

Metropolitan has in turn moved to dismiss the Fourth Party Complaint to the same extent just referred to in paragraph numbered 2.

Third Party Complaint Count I: Indemnification

Affiliated-Smiths have not even responded to Reno Zahm's motion to dismiss Third Party Complaint Count I.*fn1 Whether or not that represents an acknowledgement of the motion's soundness, there is no question Reno Zahm are right. This Court's November 29, 1985 memorandum opinion and order in Central Illinois Savings & Loan Association v. DuPage County Bank of Glendale Heights, 622 F. Supp. 1493 (N.D.Ill. 1985), has discussed the identical controlling issues at length, and its reasoning need not be repeated here.

Accordingly Affiliated-Smiths are not entitled to indemnification from Reno Zahm on any valid theory. Third Party Complaint Count I is dismissed.

   Third Party Complaint Count II and Fourth Party Complaint:
                          Contribution

To the extent contribution is sought (by either Affiliated-Smiths or Reno Zahm) to share liability under RICO, Central Illinois, slip op. at 10-15 points the way toward rejection of such relief. This Court there found indemnification inappropriate by analogy to contribution doctrines: It relied for that purpose on the decisions in Northwest Airlines, Inc. v. Transport Workers Union of America, AFL-CIO, 451 U.S. 77, 86-99, 101 S.Ct. 1571, 1577-84, 67 L.Ed.2d 750 (1981) and Texas Industries, Inc. v. Radcliffe Materials, Inc., 451 U.S. 630, 638-47, 101 S.Ct. 2061, 2065-70, 68 L.Ed.2d 500 (1981), each of which refused to imply a cause of action for contribution toward a federally-created statutory liability. Northwest Airlines and Texas Industries provide persuasive precedent (rather than merely analytical analogies) for rejection of a contribution claim as to RICO liability. Accordingly contribution as to Amended Complaint Counts II and III (each sounding in RICO) is denied.

But that reasoning does not extend to contribution as to liability for Illinois common-law fraud under Amended Complaint Count V. As to that claim, both Reno Zahm and Metropolitan urge the regime that predated the Illinois Contribution Among Joint Tortfeasors Act (the "Act," Ill.Rev.Stat. ch. 70, ¶¶ 301-305) — that is, a pre-Act judge-made doctrine barring any contribution toward liability for intentional torts — remains law under the Act. They are wrong.

True enough, the Act was stimulated by the Illinois Supreme Court's partial disavowal of the common-law prohibition of contribution among joint tortfeasors in Skinner v. Reed-Prentice Division Package Machinery Co., 70 Ill.2d 1, 15 Ill.Dec. 829, 374 N.E.2d 437 (1970). When the Illinois General Assembly acted, however, it did not limit itself to a legislative abolition of the same doctrine as to negligent torts. Instead it spoke in unequivocal terms in Act § 302(a) (emphasis added):

  Except as otherwise provided in this Act, where 2 or
  more persons are subject to liability in
  tort arising out of the same injury to persons
  or property, or the same wrongful death, there is a
  right of contribution among them, even ...

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