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06/19/87 Next Friend, Felix v. Lito Fajardo Et Al.

June 19, 1987

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION IAN PAUL STALLINGS, A MINOR BY AND THROUGH HIS FATHER AND NEXT FRIEND, FELIX STALLINGS, ET AL., PLAINTIFFS-APPELLEES

v.

LITO FAJARDO ET AL., DEFENDANTS-APPELLEES (ANCHOR ORGANIZATION FOR HEALTH MAINTENANCE, APPELLANT)



513 N.E.2d 404, 157 Ill. App. 3d 913, 111 Ill. Dec. 961 1987.IL.847

Appeal from the Circuit Court of Cook County; the Hon. Anthony J. Bosco, Judge, presiding.

APPELLATE Judges:

JUSTICE LORENZ delivered the opinion of the court. MURRAY, J., concurs. PRESIDING JUSTICE SULLIVAN, specially Concurring.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LORENZ

The instant appeal arises out of a medical malpractice action against several physicians and medical associations. On December 24, 1985, the circuit court entered an order of dismissal and order of distribution in accordance with the terms of the settlement agreement reached by the parties. Subsequent to the entry of the order of dismissal and order of distribution, Anchor Organization for Health Maintenance (Anchor), a nonparty to the action, filed a motion to vacate certain portions of the order of distribution. The circuit court denied Anchor's motion for hearing instanter and established a briefing schedule. Anchor appealed before a hearing on the motion to vacate was held. Plaintiffs and defendants filed motions to dismiss the appeal. This court took these motions with the case.

On appeal Anchor contends: (1) the order of distribution was an express adjudication which was adverse to its legal rights and pecuniary interests as a nonparty and is void or at least invalid and voidable since it was made without jurisdiction; (2) a nonparty whose legal rights and pecuniary interest have been directly, substantially and immediately affected by adverse express adjudications has standing to seek a vacation; and (3) it is entitled to have those portions of the orders vacated, reversed, stricken or expunged. We do not reach these issues because we determine that Anchor's rights were not directly and immediately affected by the order of distribution and therefore we dismiss this action because of mootness.

On May 5, 1983, a lawsuit was filed in the circuit court of Cook County by Felix and Hattie Stallings, individually and on behalf of their minor child, Ian Stallings, against several defendants, including Lito Fajardo, Chicago Heights Anesthesia Associates, St. James Hospital, and the Sisters of St. Francis Health Services. In their fourth amended complaint, plaintiffs alleged that as a result of defendants' negligence the minor plaintiff suffered extreme brain damage.

Anchor, a health maintenance organization, was not a party to this action. Its involvement in this action stems from its coverage of the Stallings family, including the minor plaintiff, for medical care. Under the terms of the Anchor subscription certificate, which governs the rights and obligations of Anchor with respect to its subscribers, Anchor is the possessor of a contractual lien. This gives Anchor the right to recover the value of medical services rendered to a beneficiary if the beneficiary receives a trial award or settlement for injuries alleged to have been caused by a third person.

The parties to this lawsuit reached a settlement agreement after participating in at least two pretrial conferences at which counsel for Anchor was present. Counsel for Anchor, along with counsel for the parties, appeared before Judge Harry S. Stark on November 21, 1985, and November 25, 1985, to discuss settlement of this action. The case was ultimately settled for a total of $6.2 million and on December 24, 1985, the circuit court entered an order of dismissal and an order of distribution in accordance with the terms of the settlement. In the order of distribution, the circuit court expressly found that the settlement was "fair, just and made in good faith." Defendants have fully satisfied their obligations under the settlement agreement.

On January 22, 1986, Anchor presented a motion to vacate, instanter, and specified portions of the circuit court's orders that Anchor asserted adversely affected its rights. Judge Bosco denied Anchor's motion for hearing instanter and set a briefing schedule. Anchor never obtained a ruling on the motion to vacate.

On January 23, 1986, Anchor filed its notice of appeal from certain portions of the order of dismissal and distribution entered on December 24, 1985. The circuit court entered its order on January 30, 1986, which order approved the settlement of the minor plaintiff's action. On February 28, 1986, Anchor filed a second notice of appeal. This notice of appeal related to the January 30 order and also incorporated by reference all matters contained in the first notice of appeal. This court, on April 17, 1986, consolidated the two appeals.

Opinion

The general rule is that before a person not a party to a proceeding can appeal he must have a direct interest in the subject matter of the litigation, which interest is prejudiced or aggrieved by the judgment sought to be reviewed. (American Surety Co. v. Jones (1943), 384 Ill. 222, 51 N.E.2d 122.) In other words, a direct, immediate and substantial interest rather than a speculative, theoretical, inconsequential or remote interest is the test as to whether a person or company may have a right of review. American Surety Co. v. Jones (1943), 384 Ill. 222, 51 N.E.2d 122.

Anchor does not dispute the validity of the order with regard to the release of their pending lien. They contend only that their future liens may be affected. Specifically, Anchor contends that the mere possibility that it may be precluded from seeking future reimbursement due to the ...


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