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05/12/88 National Railroad v. Crown-Trygg Corporation Et

May 12, 1988

NATIONAL RAILROAD PASSENGER CORPORATION, PLAINTIFF-APPELLANT

v.

CROWN-TRYGG CORPORATION ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

524 N.E.2d 954, 170 Ill. App. 3d 946, 120 Ill. Dec. 772 1988.IL.735

Appeal from the Circuit Court of Cook County; the Hon. Willard J. Lassers, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE JIGANTI delivered the opinion of the court. JOHNSON and McMORROW, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JIGANTI

More than five years after the occurrence, the plaintiff, National Railroad Passenger Corporation (Amtrak), filed a complaint against the defendants, Crown-Trygg Corporation and Carl Standmeyer, Jr. (collectively, Crown-Trygg), for property damage arising out of a collision at a railroad crossing between an Amtrak train and a Crown-Trygg truck driven by Standmeyer. Crown-Trygg moved to dismiss the complaint on the ground that the applicable five-year statute of limitations had expired. In response, Amtrak argued that Crown-Trygg was estopped from asserting the statute of limitations as a defense. After an evidentiary hearing, the trial court granted Crown-Trygg's motion to dismiss. On appeal, we are asked to decide whether the trial court's decision is contrary to the manifest weight of the evidence.

The collision, which caused damage to both train and truck, occurred on November 19, 1975. Approximately 40 passengers on the train filed personal injury suits against Amtrak and Crown-Trygg. Amtrak retained the firm of Lord, Bissell & Brook to represent them in the lawsuit. Commercial Union Insurance Company, as the insurance carrier for Crown-Trygg, retained Pretzel, Stouffer, Nolan & Rooney to represent Crown-Trygg.

Sometime after the November 19, 1975, accident, attorneys from Lord, Bissell & Brook and Pretzel & Stouffer orally agreed that, as a matter of trial strategy, they should join together in defending the personal injury cases. Both law firms recognized that a fight over whether the Amtrak train or the Crown-Trygg truck was liable for the accident would only be used to enhance the value of the passenger personal injury claims. Accordingly, both sides agreed to present a united front by disposing the passenger claims on a 50/50 nonrecourse basis and then to fight it out between themselves after the personal injury suits were settled. This agreement is central to the estoppel issue.

Attorneys from Lord, Bissell & Brook and Pretzel & Stouffer testified at the evidentiary hearing. Walton Smith, a partner with Lord, Bissell & Brook, testified that he was assigned to handle the Amtrak file in March of 1978. At that time, Smith was told that within a few days after the November 19, 1975, accident, Amtrak and Crown-Trygg agreed to cooperate in disposing the passenger claims by presenting a united front. In a letter dated November 24, 1975, an attorney from Lord, Bissell & Brook, assigned to the case at the time, confirmed the oral agreement that the passenger claims would be paid out on a 50/50 basis and noted the mutual intention of both firms to handle the claims in the most economically sound manner.

After Smith became involved in the case in 1978, the agreement was changed to split the passenger claims on a non-recourse basis, which meant that both Amtrak and Crown-Trygg were barred from later seeking indemnification for money paid out on the personal injury claims. On November 1, 1978, Smith sent a letter to Timothy Gillick, the partner who was handling the case for Pretzel & Stouffer at that time, setting forth this understanding. The letter further stated that "[the] claims of the various parties for their own property damage may be the subject of claims or litigation without respect to this agreement."

Subsequently, on November 9, 1978, a draft agreement was tendered to Amtrak. The draft, signed only by Commercial Union Insurance Company, Crown-Trygg's insurance carrier, was intended to codify the nonrecourse agreement with respect to the personal injury claims. The draft stated:

"This agreement shall not be utilized by any of the parties hereto in support of an assertion of an estoppel with respect to any further lawsuit among the Parties for property damage sustained by the Railroad Parties or the Truck Parties in connection with their vehicles and equipment."

Smith further testified that his understanding that any litigation for property damage would be deferred until the personal injury claims were resolved was reinforced by Pretzel & Stouffer attorney Gillick during their frequent meetings in the courthouse for pretrial conferences. Smith recalled Gillick saying that the parties could not afford to let the passenger plaintiffs divide them, that they should settle all cases on a 50/50 basis, and put off any litigation between Crown-Trygg and Amtrak until all the passenger cases were resolved. Smith also recalled Gillick telling the pretrial Judge that the defendants agreed to split the settlement of the personal injury cases and also agreed not to bring any actions against each other so as not to assist the plaintiffs.

Smith testified that this same understanding was further reflected in the stipulations made of record when Amtrak and Crown-Trygg employees were deposed in the passenger cases. Prior to the taking of a number of these depositions, counsel for Crown-Trygg placed of record a stipulation that neither Amtrak nor Crown-Trygg would ask any questions of the witness being deposed. Each stipulation was predicated on an agreement that ...


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