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09/11/97 KAREN ZIELKE v. HOWARD WAGNER AND KETTNER

September 11, 1997

KAREN ZIELKE, ADM'R OF THE ESTATE OF KRISTINE HOOPER, AS ASSIGNEE OF JAMES SPECIALE, INDIV. AND D/B/A TONY AND JIM'S PLACE, PLAINTIFF,
v.
HOWARD WAGNER AND KETTNER AGENCY, INC., DEFENDANTS AND THIRD-PARTY PLAINTIFFS-APPELLANTS (COOPERS AND LYBRAND L.L.P., AND COOPERS AND LYBRAND, CHARTERED ACCOUNTANTS, DEFENDANTS AND THIRD-PARTY DEFENDANTS-APPELLEES).



Appeal from the Circuit Court of Lake County. No. 95--L--662. Honorable Bernard E. Drew, Jr., Judge, Presiding.

Released for Publication October 9, 1997.

The Honorable Justice Thomas delivered the opinion of the court. Rathje, J., concurs. Justice Colwell, specially concurring.

The opinion of the court was delivered by: Thomas

The Honorable Justice THOMAS delivered the opinion of the court.

The defendants and third-party plaintiffs, Howard Wagner and Kettner Agency, Inc. (collectively, the broker defendants or brokers), appeal from an order dismissing with prejudice their third-party complaint against the third-party defendants, Coopers & Lybrand L.L.P. (hereinafter Coopers) and Coopers & Lines, d/b/a Coopers & Lybrand, Chartered Accountants (hereinafter Lines) (collectively, the accountant defendants). On appeal, the broker defendants contend that the trial court abused its discretion in subjecting to a protective order a settlement agreement entered into between the plaintiff, Karen Zielke, and the accountant defendants. The broker defendants further contend that the trial court erred in finding that their motion to strike Lines special and limited appearance was moot. We affirm.

The record reveals that Kristine Hooper died as a result of a fire that destroyed the apartment that she occupied as a tenant of James Speciale. Hooper's apartment was above a tavern known as Tony and Jim's Place, also owned by Speciale. Zielke, as administrator of the estate of Kristine Hooper, filed a wrongful death action against Speciale in the circuit court of Lake County. Speciale then filed for bankruptcy in federal court. In the bankruptcy proceeding, Speciale filed a claim against the broker defendants alleging that they negligently placed fire and extended coverage insurance with Financial Services Insurance, Ltd. (FSIL), an entity which became insolvent.

Thereafter, Zielke settled her claim in bankruptcy with Speciale and took an assignment from him of all of his claims against the defendants. Speciale's bankruptcy claim was subsequently transferred to the circuit court of Lake County where Zielke presented a motion, as assignee of the claim, to substitute herself as the only plaintiff in the action. Zielke was then granted leave to file a second amended complaint suing the broker defendants, alleging breach of contract and negligence in connection with placing coverage with FSIL and for procuring unreasonably low amounts of insurance. The broker defendants filed a third-party complaint against "Coopers and Lybrand, an international accounting firm" and served summons on Coopers, a Chicago branch. The plaintiff had also sued both Lines and Coopers. Coopers then filed a motion to dismiss, contending that the accounting in question was performed by Lines, a Bermuda firm which is a separate legal entity independent from Coopers. The brokers then filed a first amended third-party complaint against Lines. Lines then filed a special and limited appearance contesting the court's jurisdiction.

The broker defendants served a request to admit facts and genuineness of documents on both Lines and Coopers. Lines obtained an extension of time to April 15, 1996, to respond to the brokers' motion.

In August 1996, the plaintiff agreed to settle her claims against the accountant defendants. On August 19, 1996, the plaintiff and Coopers filed a joint motion pursuant to the Joint Tortfeasor Contribution Act (740 ILCS 100/0.01 et seq. (West 1994)), seeking a finding that the settlement was fair, reasonable, and made in good faith, along with an order dismissing with prejudice all claims against the accountant defendants. Lines did not sign the settlement agreement but was made a third-party beneficiary to it. Coopers also filed a motion for a protective order and for leave to file the settlement under seal alleging that the settlement contains sensitive and confidential information including the basis upon which the settlement is being consummated.

On August 28, 1996, the trial court entered an order setting a briefing schedule on the request for a good-faith finding and directing the movants to provide a copy of their settlement agreement to the broker defendants but restricting their dissemination of any of the information in the agreement solely to their counsel and their insurer.

Thereafter, the brokers filed objections to the motion for a good-faith finding and dismissal, along with objections to the motion for a protective order. The brokers also filed a motion to strike Lines' special and limited appearance on the basis that its activities in the case constituted a waiver of its special and limited appearance.

Following a hearing on October 9, 1996, the trial court found that the settlement agreement was fair, reasonable, and had been made in good faith. The court dismissed with prejudice all claims against the accountant defendants, including those raised in the third-party complaint filed by the broker defendants. The court also barred all contribution claims against the defendants, but noted that the amount paid pursuant to the settlement agreement would be a setoff against any judgment the plaintiff might obtain against the brokers. The trial court further ruled that the protective order remain in force until further order of the court. Finally, the court concluded that the brokers' motion to strike Lines' special and limited appearance was moot given the good-faith finding and the order barring contribution claims against the accountant defendants.

On appeal, the brokers argue that the trial court abused its discretion in restricting the dissemination of the information in the accountant defendants' settlement agreement. They contend that the protective order amounted to an unconstitutional prior restraint upon speech in violation of the first amendment to the United States Constitution (U.S. Const., amend. I). They also claim that the protective order unfairly precludes them from using Illinois Pattern Jury Instructions, Civil, Nos. B45.03 and 600.14 (Illinois Pattern Jury Instructions, Civil, Nos. B45.03, 600.14 (3d ed. 1995)), which relate to percentage of comparative negligence.

Where a protective order is challenged on appeal as an unconstitutional "prior restraint," the trial court's decision on the matter will not be disturbed on review absent an abuse of discretion such that the court acted arbitrarily without the employment of conscientious judgment and ignored recognized principles of law so that substantial prejudice resulted. In re J.S., 267 Ill. App. 3d 145, 148, 204 Ill. Dec. 30, 640 N.E.2d 1379 (1994). Constitutional questions not presented to the trial court may not be ...


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