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Romack v. R. Gingerich Co.

July 12, 2000

JAMES M. ROMACK, PLAINTIFF-APPELLEE,
v.
R. GINGERICH CO., AN ILLINOIS CORPORATION, DEFENDANT-APPELLANT. AND CENTRAL ILLINOIS LIGHT COMPANY, AN ILLINOIS CORPORATION, AND ENVIRONMENTAL SCIENCE AND ENGINEERING, INC., AN ILLINOIS CORPORATION, AND INDUSTRIAL HYGIENE SERVICES, INC., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court for the 10th Judicial Circuit, Tazewell County, Illinois No. 95--L--310

The opinion of the court was delivered by: Justice Breslin

Honorable John A. Barra Judge, Presiding

Plaintiff James M. Romack filed suit against defendants R. Gingerich Co. (Gingerich), Central Illinois Light Company (CILCO), and Industrial Hygiene Services, Inc. (IHS) for injuries he sustained in a work-related accident. Defendants subsequently filed suit against each other for contribution and third-party actions against Romack's employer M&O Environmental Company (M&O). A settlement agreement between Romack, CILCO, IHS and M&O was approved by the trial court and Gingerich appeals. For the following reasons, we affirm.

FACTS

Romack, an employee of M&O, was engaged in the removal of large asbestos panels from the Wallace Street Station demolition project when he was injured. At the time, Romack was standing in a dumpster, signaling a crane operator who was lowering the panels into the dumpster. The Wallace Street Station is owned by CILCO and CILCO was allegedly overseeing the demolition project. Gingerich owned the crane that was being used and also provided the crane operator. IHS was a contractor for the work involved in the demolition.

Romack filed suit against CILCO, Gingerich, and IHS alleging a cause of action for negligence. Romack also filed a worker's compensation claim against M&O. Nearly two years later, Romack entered into a lump sum settlement agreement on his worker's compensation claim. The agreement provided that M&O would pay Romack for past medical expenses plus the sum of $167,500 for wage differential settlement, vocational retraining and future medical expenses, for a total settlement of $294,000. This sum was paid by E.C. Fackler (Fackler), M&O's worker's compensation insurance carrier. In addition to the 25% statutorily mandated deduction for attorney's fees (see 820 ILCS 305/5(b) (West 1998)), M&O agreed as part of the settlement to waive 25% of its right to reimbursement. Thus, M&O retained 50% of its lien, totaling $147,385.67.

Just over two years after his worker's compensation claim was settled, Romack entered into a settlement agreement for his common law claims with CILCO and IHS, along with M&O as a third-party defendant. Under this settlement agreement, M&O, through its comprehensive general liability insurer (CGL), American International Group (AIG), was to pay Romack $83,333.33. CILCO agreed to pay Romack $50,000 and IHS agreed to pay Romack $66,667.67 for a total settlement of $200,000.

In addition, the agreement required Romack to pay M&O $63,333.33 as partial payment of the worker's compensation lien, leaving M&O with a lien remaining of $84,052.34. In consideration for this payment, M&O waived enforcement of the remaining lien against Romack, CILCO and IHS but expressly reserved its right to enforce it against any funds received by Romack from a judgment or settlement with Gingerich.

The parties to the settlement agreement filed a joint motion for good faith settlement pursuant to section 2 of the Joint Tortfeasor Contribution Act (Contribution Act) (740 ILCS 100/2 (West 1998)). Though Gingerich filed an objection, the trial court found that the settlements were made in good faith and the motion was granted. At a subsequent hearing it dismissed Romack's claims against IHS and CILCO, and also dismissed Gingerich's contribution actions against IHS, CILCO and M&O. Gingerich appealed.

ANALYSIS

A trial court's finding that a settlement agreement was made in good faith is a matter within the court's discretion and a reviewing court will not reverse such a finding absent an abuse of discretion by the trial court. In re Guardianship of Babb, 162 Ill. 2d 153, 642 N.E.2d 1195 (1994). An abuse of discretion occurs when no reasonable person would agree with the position adopted by the trial court. Schwartz v. Cortelloni, 177 Ill. 2d 166, 685 N.E.2d 871 (1997).

The sole question presented for our review is whether the trial court abused its discretion when it determined that the settlement agreement between Romack, IHS, CILCO and M&O was made in good faith.

Section 2 of the Contribution Act provides that a tortfeasor to whom a release or covenant not to sue is given in good faith is discharged from all liability for any contribution to any other tortfeasor. 740 ILCS 100/2 (West 1998). Additionally, a settlement between one tortfeasor and the plaintiff will result in an equal reduction or setoff in the amount of any judgment entered against a non-settling tortfeasor. Higginbottom v. Pillsbury Co., 232 Ill. App. 3d 240, 596 N.E.2d 843 (1992).

In determining whether the parties to a settlement agreement acted in good faith, courts must take into account all of the circumstances surrounding the settlement. Cleveringa v. J.I. Case Co., 192 Ill. App. 3d 1081, 549 N.E.2d 877 (1989). Once there has been a preliminary showing of good faith, the burden shifts to the party challenging the settlement to establish that it ...


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