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03/26/97 CIRILIO OREJEL AND SALVADOR VEGA v. YORK

March 26, 1997

CIRILIO OREJEL AND SALVADOR VEGA, INDIV. AND AS ADM'R. OF THE ESTATES OF J. JESUS OREJEL, GRACIELA OREJEL, SR., SALVADOR OREJEL, ANGELICA OREJEL, J. JESUS OREJEL, JR., GRACIELA OREJEL, JR., ERNESTO OREJEL, PATRICIA OREJEL, LUIS OREJEL, MARGARITA OREJEL, ALL DECEASED, PLAINTIFFS-APPELLEES,
v.
YORK INTERNATIONAL CORPORATION, INC., WILLIAM V. WANTUCK, D/B/A WANTUCK AND SONS, GRAYSON CONTROLS, A DIVISION OF ROBERT SHAW CONTROL COMPANY, PEOPLES GAS LIGHT AND COKE COMPANY, K AND K HEATING AND AIR CONDITIONING COMPANY, AMERICAN GAS ASSOCIATION, (YORK INTERNATIONAL CORPORATION, INC., COUNTER-PLAINTIFF-APPELLEE; WANTUCK, D/B/A WANTUCK AND SONS, GRAYSON CONTROLS, A DIVISION OF ROBERT SHAW CONTROL COMPANY, PEOPLES GAS LIGHT AND COKE COMPANY, K AND K HEATING AND AIR CONDITIONING COMPANY, AMERICAN GAS ASSOCIATION, COUNTER-DEFENDANTS-APPELLANTS).



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. No. 91 L 19861. THE HONORABLE IRWIN SOLGANICK, JUDGE PRESIDING.

Released for Publication May 12, 1997. As Corrected May 6, 1997.

Presiding Justice Cousins delivered the opinion of the court. Leavitt and Cahill, JJ., concur.

The opinion of the court was delivered by: Cousins

PRESIDING JUSTICE COUSINS delivered the opinion of the court:

Plaintiffs, the independent administrators of the deceased brought wrongful death and survival claims to recover for the deaths of 10 family members who died as the result of carbon monoxide poisoning. Defendant York International Corporation (York) entered a $10 million settlement agreement with plaintiffs, releasing York as well as other defendants from further liability. Various defendants, including York, asserted counterclaims and third-party claims in the underlying action, which are still pending before the trial court. The trial court found that the settlement was made in good faith and was fair and reasonable in its amount. Certain defendants appealed the trial court's decision, contending that: (1) the good-faith provisions of the Joint Tortfeasor Contribution Act (740 ILCS 100/0.01 et seq. (West 1992)) do not apply to the settlement reached between York and the plaintiffs; (2) the trial court erred in denying their right to have a jury determine the amount against which their contribution liability, if any, would be assessed; and (3) the trial court erred in refusing to require that York's insurance carrier be identified as a real party in interest in the prosecution of York's contribution counterclaim. York also appeals, contending that contribution defendant K&K Heating and Air Conditioning, Inc., failed to file a timely notice of appeal.

BACKGROUND

The underlying action brought by plaintiffs arises out of the deaths of J. Jesus Orejel, Sr., his wife, Graciela Orejel, Sr., and their eight children. The Orejel family died of carbon monoxide asphyxiation on or about November 8, 1991 when a lethal level of carbon monoxide escaped into their home from a breach in the vent system of their furnace. In their sixth amended complaint, plaintiffs, the independent administrators of the estates of the decedents, asserted claims of negligence and/or strict liability under the Illinois Wrongful Death Act (740 ILCS 180/0.01 et seq. (West 1992)) and the Illinois Survival Act (755 ILCS 5/27-6 (West 1992)) against the following corporations and individuals: York; K&K Heating and Air Conditioning (K&K); Inc; Marzullo Furnace Supply Company (Marzullo); Jose Duenas d/b/a Airworks Heating and Cooling (Duenas); R&D Mechanical, Inc; David Grubisic; Joseph Grubisic; Grubisic Heating and Air Conditioning (R&D Mechanical); Grayson Controls (Grayson); William V. Wantuck, d/b/a Wantuck & Sons (Wantuck); All City Heating and Cooling, Inc. (All City) *fn1; White Rodgers, Inc. *fn2; Park Heating & Air Conditioning Supply, Inc. a/k/a Park Supply, Inc. (Park Supply); Z-Flex U.S., Inc. (Z-Flex); Flexmaster Canada Ltd. (Flexmaster); Hart & Cooley, Inc. (Hart & Cooley); and the American Gas Association (AGA). The complaint alleged that the defendants were involved in the design, manufacture, certification, sale, distribution, installation, inspection, service and/or repair of the subject furnace and/or certain of its component parts.

Plaintiffs alleged in their complaint that the decedents did not die instantly upon being exposed to the carbon monoxide emitted from the breached vent system but, instead, suffered great pain from the moment of their initial exposure until the time of their respective deaths, as evidenced by the location and condition in which each of the decedent's bodies was found. Plaintiffs further alleged that, between them, J. Jesus Orejel, Sr., and Graciela Orejel, Sr., left 17 surviving next of kin.

On December 10, 1993, York filed counterclaims seeking contribution from each of the named defendants and filed a third-party complaint against the Peoples Gas Light and Coke Company (Peoples Gas), which had inspected the subject furnace on at least two occasions prior to the accident. Most other defendants also filed counterclaims against most, if not all, of their codefendants.

In February and March of 1995, counsel for York contacted counsel for all codefendants (except those that were not known to have insurance coverage) and advised them that York was interested in assembling a settlement package to offer plaintiffs. York would assume the lead in settlement negotiations with plaintiffs. York's counsel also requested the names of the insurance representatives and sought their participation in a possible global settlement. Thereafter, York contacted the various codefendants' insurers and/or counsel and sought their contribution to such a settlement. However, York was met with strong resistance by other defendants and was unsuccessful.

Nevertheless, York pursued settlement discussions with lead counsel for plaintiffs. On April 19, 1995, following extensive negotiations, York and plaintiffs orally reached a settlement agreement to pay plaintiffs $10 million in exchange for plaintiffs' agreement to release and extinguish their claims against York and all other codefendants and third-party defendants so that York could preserve and pursue its contribution claims against all other defendants. York and plaintiffs conditioned their agreement on the entry by the circuit court of an order finding that the agreement was made in good faith and was fair and reasonable in accordance with the Contribution Act. 740 ILCS 100/0.01 et seq. (West 1992). Plaintiffs also agreed to give York sufficient time to continue its efforts to seek the participation of all other defendants in contributing to the $10 million settlement and to resolve York's contribution claims.

Following the oral settlement agreement with plaintiffs, counsel for York notified all defendants of the settlement and invited them to a meeting on May 11, 1995, to discuss the possibility of obtaining the participation of all defendants in the settlement. Prior to this meeting, York and codefendant, Park Supply reached an agreement settling York's contribution claim against Park Supply for $300,000. All other codefendants, except for White Rodgers, K&K, Duenas, and R&D Mechanical, attended the May 11, 1995, meeting.

During the May 11, 1995, meeting, York's counsel and insurance representative discussed the circumstances surrounding, and the terms of, the settlement reached with plaintiffs and answered all questions related thereto. Thereafter, York again urged all parties to participate in the settlement and, upon the request of several co-defendants, conducted separate meetings to discuss participation amounts. Following this meeting, York continued settlement discussion with several of the codefendants. On July 12, 1995, York reached an agreement with another codefendant, Marzullo, to settle its contribution claim for $300,000.

In September 1995, York and plaintiffs memorialized their prior oral agreement by executing a full release and settlement agreement. This settlement provides, inter alia, that York agrees to pay $10 million in consideration of plaintiffs' compromise and full settlement and extinguishment of all of their claims against all defendants and third-party defendants, as well as other named potential tortfeasors; that York intends to retain, preserve, and fully pursue its rights of contribution against all defendants expressly identified in the settlement as well as any other released parties; and that the settlement is wholly conditioned upon the entry of a final order finding the settlement was made in good faith and was fair and reasonable pursuant to the Contribution Act.

On October 19, 1995, York filed with the circuit court its motion for a good-faith finding concerning its settlement with plaintiffs and requested the court to: dismiss all of plaintiffs' claims against all parties; enter a finding that the settlement was reached in good faith and was fair and reasonable in its amount; discharge York from any further liability from any other potential tortfeasors; and dismiss all of York's codefendants' claims against York. Certain of York' codefendants opposed this motion, arguing that a good-faith finding was unnecessary under the circumstances presented and that, in any event, their right to a trial by jury required that a jury, rather than the trial court, determine whether the settlement was entered in good faith and was reasonable in its amount. These codefendants also requested that the court substitute York's insurance carrier as the named plaintiff in the caption of this matter.

York and the codefendants fully briefed York's motion, and on December 21, 1995, the circuit court conducted a hearing on the motion. The court heard extensive argument on the motion and, at the conclusion of this hearing, granted York's motion in its entirety and denied the request to recaption this action. The court specifically ruled that it was appropriate for York to seek a good-faith finding with regard to the settlement and found that the $10 million settlement figure was reasonable. The court also determined that, under Illinois law, those opposed to York's motion did not have a right to a jury trial to determine the amount of the damages.

Notices of appeal were filed by Flexmaster, Wantuck, Grayson, Hart & Cooley *fn3, Peoples Gas, AGA, and K&K, and these appeals were subsequently consolidated. Since the filing of this appeal, Hart & Cooley and Flexmaster have reached settlements with York. Grayson, Peoples Gas, AGA, and K&K have adopted Wantuck's brief in whole or in part. Specifically, Grayson has specifically not adopted Wantuck's constitutional argument that a jury, rather than the circuit court, should determine the reasonableness of the settlement amount. However, we will refer to all contribution defendants as "Wantuck."

We affirm.

ANALYS ...


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