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04/07/95 MARTHA WARSING v. MATERIAL HANDLING

April 7, 1995

MARTHA WARSING, ADM'R OF THE ESTATE OF HOWARD WARSING, PLAINTIFF,
v.
MATERIAL HANDLING SERVICES, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLANT (ROBERT A. WANDELL, THIRD-PARTY DEFENDANT-APPELLEE).



Appeal from the Circuit Court of Winnebago County. No. 92-L-500. Honorable Galyn W. Moehring, Judge, Presiding.

The Honorable Justice Inglis delivered the opinion of the court: Greiger and Hutchinson, JJ., concur.

The opinion of the court was delivered by: Inglis

JUSTICE INGLIS delivered the opinion of the court:

Defendant and third-party plaintiff, Material Handling Services, Inc. (Material), appeals the dismissal of its third-party contribution complaint against third-party defendant, Robert Wandell (Wandell). The dismissal was based on a settlement between Wandell and plaintiff, Martha Warsing, as administrator of the estate of Howard Warsing. Material challenges the court's finding that the settlement was made in good faith. We reverse and remand.

Plaintiff's decedent, Howard Warsing, was killed when Material's forklift, driven by Wandell, rolled off the hydraulic lift of a truck and fell on decedent. Plaintiff's complaint alleged that decedent had rented the forklift from Material. Material allegedly was negligent in (1) representing to decedent that the lift gate of the truck in which the forklift was to be transported was adequate for removal of the forklift; (2) failing to warn decedent that the forklift exceeded the weight limits of the lift gate; and (3) loading the forklift on the truck when Material's agents or employees knew or should have known that the lift gate was not suitable for unloading the forklift. The complaint was amended after the settlement to allege also that Material was negligent in providing inadequate or incorrect instruction on the use of the forklift and in failing to instruct adequately or properly in the proper use and movement of the forklift.

Material's third-party complaint for contribution alleged that Wandell assisted decedent in transporting the forklift. Wandell allegedly was negligent in (1) choosing to remove the forklift from the bed of a truck via a hydraulic lift gate, when he knew or should have known that the relative sizes of the forklift and the lift gate required difficult turning maneuvers, which he knew or should have known could result in the forklift rolling off the lift gate as it was being unloaded; (2) failing to maneuver properly and control the forklift as it was moved onto the lift gate; (3) failing to take necessary precautions to prevent the forklift from rolling off the back of the lift gate; and (4) loading the forklift on the truck when decedent knew or should have known that the lift gate was unsuitable for unloading the forklift. Wandell denied any negligence.

Subsequently, Wandell moved for a good-faith finding and an order in bar of contribution. He asserted that he tendered the defense of the third-party action to his insurance company, Pekin Insurance (Pekin). Pekin provided defense counsel to Wandell under a reservation of rights and filed a declaratory action to determine coverage. Wandell appended a copy of the declaratory judgment complaint.

He also attached to the motion his affidavit setting forth his assets and financial status. The affidavit represented, among other things, that Wandell was the sole proprietor of a company that repairs electric motors. The business had accounts receivable of $500 to $600 and $1,000 cash. Wandell and his wife had $3,000 in a savings account, and he had an IRA with a balance of $1,000. In addition, Wandell stated that since January 3, 1994, he was employed full time by a company that repairs refrigerator compressors. He did not state the amount of his salary. Wandell and plaintiff entered into a settlement for $1,000, which was paid by Pekin.

Material objected to the motion for a good-faith finding on the grounds that Wandell bore a substantial portion of the fault in causing the accident, the potential damages were great, and the relationship between plaintiff and Wandell suggested collusion. Specifically, Material pointed out that plaintiff's family and the Wandells were very close friends. Material also noted that Wandell had potential insurance coverage of $300,000 under the Pekin policy.

The court ruled that the settlement was made in good faith. It therefore dismissed the third-party complaint with prejudice. Material timely appealed, pursuant to Supreme Court Rule 304(a). Official Reports Advance Sheet No. 26 (December 22, 1993), R. 304(a), eff. February 1, 1994.

As a preliminary matter, we address plaintiff's motion to strike portions of Wandell's brief. We ordered the motion taken with the case. Plaintiff requests that we strike Wandell's arguments that the damages in this case are limited under Wisconsin law. According to plaintiff, Wandell incorrectly states the law in Illinois regarding choice of law issues. Plaintiff fears that if this court incorporates a reference to Wisconsin law in this disposition, she would be bound to Wisconsin law in the trial court.

We deny the motion to strike portions of Wandell's brief. We will consider Wandell's arguments in that regard, but we will not determine whether Wisconsin law applies here. As such, plaintiff's concerns will be adequately addressed.

We also note that after the briefs were filed, Material filed a motion in this court requesting that we take judicial notice of a judgment entered in Pekin's declaratory judgment action. The court in that case entered summary judgment against Pekin, declaring that it owed Wandell a duty to defend and indemnify him in the third-party action. Wandell objects to our taking judicial notice, arguing that the Pekin action is not final because it is appealable. We grant the motion and take judicial notice of that order.

Under the Contribution Act, where two or more persons are potentially liable in tort for the same injury or the same wrongful death, there is a right of contribution among them. (740 ILCS 100/2(a) (West 1992).) However, when a tort-feasor settles in good faith with the injured party, that tort-feasor is discharged from contribution liability, and the remaining tort-feasors' liability is reduced by the amount of the settlement. (740 ILCS 100/2(c), (d) (West 1992).) "The only limitation that the Contribution Act places upon the parties' right to settle and thereby ...


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