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12/29/95 AUGUSTINE FERNANDEZ AND DONNA FERNANDEZ v.

December 29, 1995

AUGUSTINE FERNANDEZ AND DONNA FERNANDEZ, PLAINTIFF-APPELLEES,
v.
TEMPEL STEEL CORPORATION, DEFENDANT-APPELLANT, AND NANCY F. GOLDBERG, DEFENDANT. TEMPEL STEEL CORPORATION, DEFENDANT-THIRD PARTY PLAINTIFF-APPELLANT, AND NANCY F. GOLDBERG, DEFENDANT-THIRD PARTY PLAINTIFF, V. DIEMER PLUMBING & HEATING, LTD., THIRD PARTY DEFENDANT-APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE KENNETH L. GILLIS, JUDGE PRESIDING.

The Honorable Justice Gordon Delivered The Opinion OF The Court: Cousins, Jr., P.j., and T. O'brien, J., concur.

The opinion of the court was delivered by: Gordon

The Honorable Justice GORDON DELIVERED THE OPINION OF THE COURT:

Plaintiffs, Augustine and Donna Fernandez, sought recovery against defendant, Tempel Steel Corporation (Tempel) under the Structural Work Act and for ordinary negligence. Augustine also sought recovery under the Structural Work Act against defendant, Nancy F. Goldberg. Both defendants brought a third-party action against Diemer Heating and Plumbing, Ltd. (Diemer), Augustine Fernandez' employer, seeking contribution. Diemer subsequently reached a combined settlement with the plaintiffs concerning the civil action and worker's compensation claim and moved for court approval of the settlement. Over defendants' objections, the trial court found that the settlement was made in good faith and dismissed the third-party complaint against Diemer.

Pursuant to Supreme Court Rule 304(a) (157 Ill. 2d R. 304(a)), Tempel appeals from the trial court order dismissing its third party action against Diemer and raises the following issues: (1) whether the trial court erred in finding the settlement between Diemer and the plaintiffs was in good faith when the settlement did not yield the plaintiffs any benefit and therefore lacked consideration; and (2) whether a waiver of a worker's compensation lien can act as consideration to a spouse for her loss of consortium claim.

Before we reach the merits of Tempel's appeal, we must address Diemer's motion with this court to dismiss the appeal on the ground of mootness. The facts relevant to that issue are as follows. While Tempel's appeal in this court was pending, the underlying action against Tempel proceeded to jury trial; and a verdict was entered in the plaintiffs' favor. On August 25, 1995, the plaintiffs and Tempel entered into a settlement agreement captioned "General Release." This release stated that in consideration for Tempel's agreement to waive an appeal of the jury verdict and Tempel's payment of $2 million, the plaintiffs:

"hereby release, remise, and forever discharge Tempel Steel *** and all other persons, firms, corporations, associations or partnerships of and from any and all claims, actions, causes of action, demands, rights, damages, costs, loss of service, expenses and compensation whatsoever, which the undersigned now have or which may hereafter accrue on account of or in any way growing out of *** the accident, casualty or event which occurred on or about the 31st of January, 1990 *** liability which is expressly denied by said Releasees.

"It is understood and agreed that this settlement is the compromise of a doubtful and disputed claim, and that the payment made is not to be construed as an admission of liability on the part of the party or parties hereby released, and that said Releasees deny liability therefor and intend merely to avoid litigation and buy their peace."

Diemer contends that the above-cited settlement agreement between Tempel and the plaintiffs bars Tempel from seeking contribution from Diemer, a joint tortfeasor, under the Joint Tortfeasor Contribution Act (740 ILCS 100/0.01 et seq. (West 1994)) (the Contribution Act). Section 2(e) of that Act provides:

"A tortfeasor who settles with a claimant pursuant to paragraph (c) is not entitled to recover contribution from another tortfeasor whose liability is not extinguished by the settlement." (740 ILCS 100/2(e) (West 1994).)

The relevant portion of section 2(c) of the Act provides:

"When a release or covenant not to sue or not to enforce judgment is given in good faith to one or more persons liable in tort arising out of the same injury or the same wrongful death, it does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms so provide." 740 ILCS 100/2(c) (West 1994).

In a factually similar case, Dixon v. Chicago & North Western Transportation Co. (1992), 151 Ill. 2d 108, 601 N.E.2d 704, 176 Ill. Dec. 6, our supreme court held that a settlement agreement between the appellant and the plaintiff/claimant, while the appellant's appeal from the dismissal of its third-party contribution action was pending, rendered that appeal moot. The appellant, Chicago and North Western Transportation (North Western), was one of several defendants in a personal injury action brought by Dixon, the plaintiff/claimant. North Western brought a third-party action against several defendants, "the Jeep defendants." That third-party action was dismissed after the trial court approved a settlement between Dixon and the Jeep defendants. North Western appealed the dismissal contending that the settlement between Dixon and the Jeep defendants was not reached in good faith (see Ill. Rev. Stat. 1987, ch. 70, pars. 302(c),(d) now at 740 ILCS 100/2(c),(d) (West 1994)). The appellate court affirmed the dismissal; and North Western appealed to the supreme court. While that appeal was pending, North Western reached a settlement with Dixon. Finding that the Jeep defendants were not parties to the settlement agreement between North Western and Dixon, the supreme court held that, under the plain language of section 2(e) of the Contribution Act, North Western was not entitled to seek contribution from the Jeep defendants. Accordingly, the court held that North Western's appeal from the dismissal of its third-party action seeking contribution was rendered moot.

In the instant case, as in Dixon v. Chicago & North Western Transportation Co., Tempel, the appellant, who was a co-defendant and third-party plaintiff, reached a settlement agreement with the plaintiffs, Augustine and Donna Fernandez, while Tempel's appeal from the dismissal of its third-party action for contribution against Diemer was pending. The settlement agreement between Tempel and the plaintiffs provided for the release and discharge from liability ...


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