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February 2, 1994


Appeal from the Circuit Court of the 13th Judicial Circuit, Will County, Illinois. No. 89 L 633. Honorable Herman S. Haase, Judge Presiding

Present - Honorable Peg Breslin, Justice, Honorable Tom M. Lytton, Justice, Honorable Michael P. Mccuskey, Justice

The opinion of the court was delivered by: Mccuskey

Justice McCUSKEY delivered the opinion of the court:

The plaintiff, Richard Dolan (Dolan), appeals from an order granting the defendants, Frank Gawlicki and Gawlicki and Hussey, Inc., a reduction in the jury's award for settlement amounts the defendants' primary insurance carrier paid to Dolan prior to trial.

Dolan argues that the trial court committed error in reducing the verdict by amounts the defendants previously paid in partial settlement of the case. We agree and reverse. We cannot approve the setoff here because the trial court failed to allocate damage amounts to particular settled claims.

On June 8, 1989, Anne Dolan (Anne) was killed when a van driven by defendant Frank Gawlicki and owned by defendant Gawlicki and Hussey, Inc. collided with Anne's car. Anne was survived by her husband, plaintiff Richard Dolan, and her two children, Kevin Dolan (Kevin) and Erin Dolan (Erin). On July 26, 1989, Dolan was appointed special administrator of his wife's estate. On the same day, he filed a two-count complaint against the defendants for wrongful death and for Anne's conscious pain and suffering between the time of the accident and the time of her death. Dolan's complaint included allegations of loss of services, society and consortium.

On September 4, 1990, Dolan entered into a partial settlement with both defendants. The defendants' primary insurance carrier paid the policy limit of $500,000. In exchange for the partial settlement amount, Dolan signed a covenant not to execute any judgment he might obtain against the defendants' personal or corporate assets. The $500,000 settlement was distributed as follows: $265,855.11 to Dolan, $50,000 to Kevin, and $50,000 to Erin. The remainder of the settlement amount was applied toward attorney fees and payment to a third party for property damage. The trial court did not determine the amounts applicable to particular injuries for which the settlement compensated Dolan. After Dolan and the defendants effected the partial settlement, Dolan proceeded to trial against the defendants with their excess insurance carrier.

On November 8, 1991, Dolan remarried. Subsequently, on October 21, 1992, the defendants filed a motion in limine seeking, among other things, to limit any damages for Dolan's loss of consortium and services to the period between Anne's death and Dolan's remarriage. On March 1, 1993, the trial court granted the motion in limine. As a result, Dolan's claim for loss of services and consortium beyond the date of his remarriage was no longer an element of damages in the litigation.

Shortly thereafter, the defendants admitted liability for Anne's death. Consequently, the case proceeded to trial on the issue of damages alone. After a trial, the jury returned a verdict for the Dolans on March 5, 1993. The jury assessed damages of $1,225,000 and allocated the awards as follows: $100,000 for Dolan's loss of society; $500,000 each for Kevin and Erin's loss of society; $25,000 for the loss of Anne's services; and $100,000 for the loss of Anne's income.

On March 22, 1993, the defendants filed a motion to offset the jury's award by $492,900.99, the amount of the prior settlement previously paid to the Dolans. The defendants asserted that the prior payment partially satisfied the verdict amount. On April 14, 1993, the trial court agreed and ordered that the jury's award be reduced by the amount the Dolans received from the defendants' primary insurance carrier. On May 11, 1993, Dolan filed a timely notice of appeal.

Dolan contends that the trial court erred in granting the defendants' motion for setoff. In support of his contention, Dolan asserts that because the trial court failed to make allocations of the settlement amounts to various elements of damages, the verdict cannot be reduced by the settlement amount in any principled manner. For the reasons which follow, we agree with Dolan's contention. Accordingly, we reverse the judgment of the trial court.

In Barkei v. Delnor Hospital (1990), 207 Ill. App. 3d 255, 565 N.E.2d 708, the plaintiffs were an infant and her parents who brought an action against two physicians and a hospital for injuries sustained shortly after the infant's birth. The plaintiffs sought damages for, among other things, the child's past and future medical expenses. Prior to trial, the plaintiffs settled with the physicians for $1,150,000. Of that settlement amount, $150,000 represented the parents' settlement of their claims against the physicians. Following the trial against Delnor alone, the jury awarded a verdict of $166,886.92 allocable to the parents.

Delnor sought a reduction of its liability to the parents based on the prior settlement with the physicians. The trial court refused, stating that it would have to speculate in order to determine what amounts of the parents' settlement were attributable to (1) the parents' medical expenses already incurred; (2) the parents' projected future medical expenses for the child to the age of majority; and (3) the parents' claims for the loss of their child's society. The second district appellate court affirmed, noting that the record did not establish how much of the parents' settlement with the physicians was intended to compensate for the child's medical expenses. Finally, the court noted that though part of the settlement was intended to compensate for the child's medical expenses, no evidence in the record indicated that the settlement provided compensation for all such expenses. Barkei, 207 Ill. App. 3d at 265-67, 565 N.E.2d at 714-15.

In Kipnis v. Meltzer (1st Dist. September 7, 1993), 1993 Ill. App. LEXIS 1364, No. 1-92-2938, the plaintiff and her husband Ira filed an action claiming negligent care and treatment by the defendant physicians, Drs. Meltzer and Chervony. Prior to trial, the plaintiff and Ira dismissed their claims against Chervony in exchange for payment of $300,000. None of the parties asked the court to allocate the settlement between the plaintiff and Ira. Following the settlement, Ira dismissed his claim against Meltzer. However, the plaintiff obtained a $20,000 jury verdict against Meltzer. After the trial, Meltzer filed a motion seeking a reduction of the plaintiff's verdict to zero by virtue of the pretrial settlement with Chervony. The trial court denied Meltzer's motion. The appellate court affirmed, noting that the settlement with a joint tortfeasor was not apportioned between the plaintiff and her husband. Accordingly, Meltzer was unable to prove how much of the $300,000 settlement with Chervony was attributable to the plaintiff's claims as opposed to Ira's claims. Consequently, the court declined to set off any of the settlement against the verdict for ...

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