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Doellman v. Warner & Swasey Co.

OPINION FILED SEPTEMBER 23, 1986.

SANDRA DOELLMAN, ADM'R OF THE ESTATE OF CHRISTOPHER DOELLMAN, DECEASED, PLAINTIFF,

v.

WARNER & SWASEY COMPANY ET AL., DEFENDANTS (WARNER & SWASEY COMPANY, THIRD-PARTY PLAINTIFF-APPELLANT; DE-STA-CO ET AL., THIRD-PARTY PLAINTIFFS; ELECTRIC WHEEL COMPANY, THIRD-PARTY DEFENDANT-APPELLEE).



Appeal from the Circuit Court of Cook County; the Hon. Thomas J. O'Brien, Judge, presiding.

JUSTICE SCARIANO DELIVERED THE OPINION OF THE COURT:

This is an appeal from the dismissal of appellant Warner & Swasey Company's third-party complaint for contribution filed against Electric Wheel Company, appellee herein. Appellee had earlier settled with another third-party claimant who sought contribution from appellee regarding the same accident. The circuit court ultimately found that appellee's settlement of that related contribution complaint was made in good faith, and that appellee was therefore absolved of all further liability for contribution under the terms of the Contribution Among Joint Tortfeasors Act (hereinafter the Act) (Ill. Rev. Stat. 1985, ch. 70, par. 301 et seq.). Warner & Swasey appeals from that decision by the circuit court. We affirm.

The instant litigation arose from the death of Christopher Doellman, who was killed as he was operating a lathe for his employer, appellee Electric Wheel Company. The lathe was a "turret" lathe, manufactured by appellant, and was equipped with a holding fixture fabricated by appellee. That fixture had in turn been incorporated into a clamp manufactured by De-Sta-Co, and distributed by L.R. Christiansen Company (co-defendants along with appellant in plaintiff Sandra Doellman's original wrongful-death action. These co-defendants are collectively referred to herein as DSC). The lathe and attachments were used to hold rotating bent spindles in place while Christopher polished them with emery cloth. At the time of the accident, Christopher had an 8-foot length of cloth wrapped around his wrist and hand. When the cloth became entangled with the lathe, Christopher was pulled into the lathe and fatally injured. There were no witnesses to the accident.

Sandra Doellman filed a wrongful-death suit against appellant in her capacity as administrator of Christopher's estate, asserting that appellant was negligent in the design and manufacture of the lathe, and that appellant also had failed to provide adequate instructions and warnings regarding the use of the lathe. Sandra raised similar allegations against DSC regarding the design, manufacture, instructions and warnings about the clamp.

Appellant and DSC each impleaded appellee into the case through third-party complaints, both seeking contribution from appellee in the event that any damages ultimately were awarded to Christopher's estate. Sandra also filed a workers' compensation claim against appellee, which resulted in an award valued at over $250,000. As of January 1, 1985, appellee had paid plaintiff $56,925.23 in workers' compensation benefits; any recovery plaintiff received as a result of the lawsuit was subject to appellee's statutory workers' compensation lien, in the amount of the benefits paid.

Settlement negotiations among all the parties ensued, including the parties to this appeal, during which plaintiff's attorney indicated that plaintiff would settle the entire case for $250,000 plus a waiver of the workers' compensation lien. Appellee offered to contribute $140,000 to co-defendants/third-party plaintiffs (appellant and DSC), and to release its workers' compensation lien, and DSC offered $5,000 towards the settlement. This left a balance of $105,000 for appellant to satisfy, but appellant balked at the proposed agreement, refusing to offer more than $25,000 towards settling the case.

Appellant did suggest that plaintiff be offered a total of $170,000 plus a waiver of the workers' compensation lien, an amount equal to the settlement appellant had rejected (with appellant's liability reduced from $105,000 to $25,000). Plaintiff rejected this offer, but did agree to settle the case as to all the parties except appellant in accordance with the previous proposal.

On December 7, 1984, appellee offered $140,000 in contribution towards a settlement of the third-party claims against it, and to waive its statutory workers' compensation lien. DSC accepted appellee's offer, and agreed to settle with plaintiff for $145,000. Plaintiff's offer to settle with appellant for $75,000 was rejected by appellant. Appellee, plaintiff and DSC ultimately settled the case on the above-indicated terms, exchanging appropriate releases from liability and leaving only appellant as defendant in the action. This status was formalized on January 16, 1985, when the circuit court approved the settlement and dismissed all parties pursuant to this agreement, reserving only the case as to appellant.

On January 31, 1985, appellant moved to vacate the order, and appellee moved for dismissal of appellant's third-party complaint for contribution as per the Act. (Ill. Rev. Stat. 1985, ch. 70, par. 302.) The issues raised by those motions were briefed to the circuit court, which on April 23, 1985, ruled that the settlement did not discharge appellee from liability for contribution to appellant, as appellee was an employer (therefore outside the ambit of the discharge provisions of the Act), and because the court found that the settlement was not entered into in good faith.

Both appellee and plaintiff filed motions to reconsider that decision, and a hearing was held on those motions on June 5, 1985. The circuit court confessed error at that time and vacated its April 23, 1985, order. After hearing further argument on August 6, 1985, the court ruled that the settlement between DSC and appellee was made in good faith, and that the discharge provisions of the Act were therefore applicable. Accordingly, the circuit court granted appellee's motion to dismiss appellant's contribution claim against it.

Appellant thereafter entered into its own settlement negotiations with plaintiff, resulting in an agreement to pay plaintiff $58,333.34 to terminate its part of the litigation. After reaching that agreement, appellant perfected this appeal in order to contest the court's decision to dismiss the contribution complaint.

Appellant's challenge to the circuit court's decision is twofold. Initially, appellant asserts that appellee did not establish the nexus necessary to fall within the ambit of the Act's discharge provisions. Alternatively, appellant contends that appellee's settlement was, in fact, a ruse designed to evade its liability on appellant's contribution complaint; this deceit allegedly robbed that settlement of the good faith required for discharge under the Act. Neither of these assertions survives scrutiny.

Both issues revolve around the language of the Act itself. The relevant portions of the Act provide:

"Sec. 302. Right of Contribution. (a) 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 person or property, or the same wrongful death, there is a right of contribution among them, even ...


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