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Adams v. American International Group

April 11, 2003

DAGMAR ADAMS, AS MOTHER AND NEXT FRIEND OF TIFFANY ADAMS, A DISABLED PERSON, PLAINTIFF-APPELLANT,
v.
AMERICAN INTERNATIONAL GROUP, INC., A CORPORATION, DEFENDANT-APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE JOHN MADDEN, JUDGE PRESIDING. JUSTICE HARTIGAN

UNPUBLISHED

Plaintiff Dagmar Adams, as mother and next friend of Tiffany Adams, appeals the dismissal of her complaint seeking prejudgment interest from defendant American International Group (AIG) on the proceeds of a settlement paid by American International Specialty Lines Insurance Company (AISLIC). Plaintiff raises the following issues on appeal: (1) whether the complaint states a cause of action for prejudgment interest, specifically, whether the release executed by plaintiff is an "instrument of writing" within the meaning of section 2 of the Illinois Interest Act (the Interest Act)(815 ILCS 205/2 (West 2000)); (2) whether the complaint states a cause of action for unjust enrichment; (3) whether the release bars plaintiff's action; and (4) whether AIG is a proper party. For the reasons that follow, we hereby affirm.

I. BACKGROUND

This appeal stems from a negligence action brought by plaintiff in 1995, against Glen Oaks Nursing Center, Inc. (Glen Oaks), and others for damages suffered by Tiffany Adams, a disabled person, while a patient at Glen Oaks. In October 2000, the parties to the negligence action reached an oral settlement agreement which provided for a $250,000 payment to plaintiff, payable in two equal installments of $125,000. Thereafter, on October 26, 2000, plaintiff executed a release discharging Glen Oaks and its insurers. The release states that it is executed "in consideration of the payment of the total sum of Two-Hundred Fifty Thousand Dollars." The release acknowledges that as a condition precedent to payment, plaintiff was to obtain a court order approving the settlement. The release further states that the settlement payment would be made in two equal installments of $125,000. The release does not state a due date for the payments, nor does it provide for the payment of interest. On November 15, 2000, AISLIC paid plaintiff the first installment of $125,000. On December 15, 2000, AISLIC paid plaintiff the second and final installment of $125,000.

On December 27, 2000, two weeks after receiving the final installment, plaintiff filed the instant lawsuit against AIG. Plaintiff's complaint alleges that, at the time of the occurrence giving rise to the negligence action, Glen Oaks was insured "by either AIG or one of its member companies who undertook to defend the suit." *fn1 The complaint alleges that on October 13, 2000, AIG and plaintiff agreed to settle plaintiff's negligence claim for $250,000 to be paid in two equal installments; the first in October 2000, and the second in November 2000. The complaint further alleges that on October 27, 2000, plaintiff forwarded a release to AIG releasing Glen Oaks from its liability arising out of the occurrence. According to the complaint, AIG did not pay the October 2000 installment of $125,000 until November 15, 2000, and did not pay the November 2000 installment until December 15, 2000.

In count I of the complaint, plaintiff seeks prejudgment interest pursuant to section 2 of the Interest Act (815 ILCS 205/2 (West 2000)). In count II of the complaint, plaintiff seeks prejudgment interest based on a theory of unjust enrichment asserting that AIG retained the settlement funds beyond the time agreed to for its own purposes, in violation of "fundamental principles of justice and good conscience."

In addition to seeking judgment against AIG for the interest allegedly due plaintiff, the complaint also asks that plaintiff be allowed to maintain her action as a nationwide class action, for an accounting by AIG of "every third party liability claim settlement entered into," and for judgment in the amount of interest that accrued on each settlement. *fn2

On April 25, 2001, defendant moved to dismiss the complaint pursuant to sections 2-615 and 2-619 of the Illinois Code of Civil Procedure (the Code)(735 ILCS 5/2-615, 2-619 (West 2000)). With respect to count I, AIG argued plaintiff could not state a claim under the Interest Act because plaintiff's release imposes no interest obligation on the releasees nor did the settling parties otherwise agree that interest was payable on the settlement amount. With respect to count II, AIG argued Illinois does not allow recovery on an implied contract, i.e., an implied contract to pay interest, when an express contract, i.e., the October 13, 2001 settlement agreement, exists between the parties.

In the alternative, AIG argued that plaintiff's claims were barred by the release executed by plaintiff against Glen Oaks and its insurers. In the further alternative, AIG argued that plaintiff named the wrong entity as defendant.

After a hearing on AIG's combined motion, the trial court granted the motion "on all grounds *** recited" and dismissed plaintiff's complaint with prejudice. Plaintiff now appeals.

II. ANALYSIS

A. Standard of Review

A motion to dismiss under section 2-615(a) of the Code (735 ILCS 5/2-615(a) (West 2000)) tests the legal sufficiency of the plaintiff's claim, while a motion to dismiss under section 2-619(a) (735 ILCS 5/2-619(a) (West 2000)) admits the legal sufficiency of the plaintiff's claim, but asserts certain defects or defenses outside the pleading that defeat the claim. See Provenzale v. Forister, 318 Ill. App. 3d 869, 878, 743 N.E.2d 676 (2001); Joseph v. Chicago Transit Authority, 306 Ill. App. 3d 927, 930, 715 N.E.2d 733 (1999). Under either ...


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