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Kulchawik v. Durabla Manufacturing Co.

February 27, 2007

SHERYL KULCHAWIK; MARY DAVIS, SPECIAL ADMINISTRATOR OF THE ESTATE OF HAROLD DAVIS, DECEASED; ROBERT BUHS; PAUL MAHAFFEY; WILLIAM K. KESSLER, SPECIAL ADMINISTRATOR OF THE ESTATE OF WILLIAM M. KESSLER, DECEASED; MARION GERDES, SPECIAL ADMINISTRATOR OF THE ESTATE OF WAYNE GERDES, DECEASED; ELAINE MCLAUGHLIN, SPECIAL ADMINISTRATOR OF THE ESTATE OF ROBERT MCLAUGHLIN, DECEASED; ROBERT FRANKENBACH, SPECIAL ADMINISTRATOR OF THE ESTATE OF JOHN FRANKENBACH, DECEASED; ANTHONY LEAZZO; BERNICE E. RODGERS, SPECIAL ADMINISTRATOR OF THE ESTATE OF ELWYN RODGERS, DECEASED; SARAH MAXIE, SPECIAL ADMINISTRATOR OF THE ESTATE OF KENNETH MAXIE, DECEASED; LILA MORRIS, SPECIAL ADMINISTRATOR OF THE ESTATE OF THOMAS MORRIS, DECEASED; MICHAEL BOATMAN, EXECUTOR FOR THE ESTATE OF RAYMOND KNARIAN, DECEASED; KENNETH SARICH, SPECIAL ADMINISTRATOR OF THE ESTATE OF MARLENE SARICH, DECEASED; CAROL CONNOLLY, SPECIAL ADMINISTRATOR OF THE ESTATE OF PATRICK CONNOLLY, DECEASED; ROBERT FRANKENBACH, SPECIAL ADMINISTRATOR OF THE ESTATE OF SHIRLEY FRANKENBACH, DECEASED; DONNA BARGAS, SPECIAL ADMINISTRATOR OF THE ESTATE OF RAYMOND BARGAS, DECEASED; MARY BAKER AND DEVON FAULKNER, CO-PERSONAL REPRESENTATIVES OF THE ESTATE OF ALMETA FAULKNER, DECEASED; AGNES ROBINSON, SPECIAL ADMINISTRATOR OF THE ESTATE OF JACK ROBINSON, DECEASED; RITA WERNER, SPECIAL ADMINISTRATOR OF THE ESTATE OF LARRY WERNER, DECEASED; STANLEY MARCINKOWSKI, III, SPECIAL ADMINISTRATOR OF THE ESTATE OF STANLEY MARCINKOWSKI, DECEASED; GERARDINA MANZI, SPECIAL ADMINISTRATOR OF THE ESTATE OF ANTONIO MANZI, DECEASED; GERALD LORENTZE, SPECIAL ADMINISTRATOR OF THE ESTATE OF NANCY LORENTZEN, DECEASED; MARY A. LANGNER, SPECIAL ADMINISTRATOR OF THE ESTATE OF RUSSELL LANGNER, DECEASED; IRENE PABIAN-KOLBUS, SPECIAL ADMINISTRATOR OF THE ESTATE OF RICHARD KOLBUS, DECEASED; LINDA BARISAS, EXECUTOR OF THE ESTATE OF ROBERT BARISAS, DECEASED; DON SCOTT; SUZANNE MCDONOUGH, SPECIAL ADMINISTRATOR OF THE ESTATE OF THOMAS MCDONOUGH, DECEASED, PLAINTIFFS-APPELLEES,
v.
DURABLA MANUFACTURING COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. Honorable William D. Maddux, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Wolfson

At issue is a purported settlement agreement between a group of plaintiffs involved in asbestos litigation and the defendant, Durabla Manufacturing Company (Durabla). Durabla says the agreement is invalid because its counsel lacked the authority to enter into the settlement absent Durabla's express permission. We affirm the trial court's orders finding an enforceable agreement existed between the parties.

FACTS

Durabla, an asbestos manufacturer, was named in several hundred asbestos personal injury lawsuits in Cook County. In most of the Cook County cases, the plaintiffs were represented by the law firm of Cooney and Conway. On April 23, 2003, Robert Meyer, counsel for Durabla, wrote a letter to William Fahey, a partner at Cooney and Conway, confirming a settlement agreement resolving claims between Durabla and "all pending and future Cooney and Conway cases involving Durabla." Meyer was subsequently dismissed as Durabla's counsel in Illinois.

The April 23, 2003, letter specified the amounts of the settlements, which varied depending on the individual plaintiff's diagnosis. The letter noted Durabla would pay the appropriate settlement amount "in all cases in which product exposure is demonstrated by affidavit, and/or interrogatory answers." Durabla agreed to pay the appropriate amount "within 90 days of receipt of the affidavit and/or interrogatory answers and a medical report or medical record showing the appropriate diagnosis." Upon payment, Cooney and Conway was required to provide a full release and a stipulation for dismissal with prejudice.

Between April 2003 and January 2005, Durabla settled and paid 128 claims under the process outlined in the settlement letter. Following a discussion between Cooney and Conway and Durabla's current attorney, the settlement agreement was terminated on February 8, 2005. The attorneys agreed any case filed on or before February 7, 2005, was subject to the prior agreement. The record contains a copy of an email dated February 8, 2005, from Cooney and Conway to Durabla's current attorney. It states, in part:

"i want to thank dave and you for taking the time to meet today. i want to memorialize our discussions as i understand them. as of feb. 8, 2005 durabla has terminated its settlement agreement with cooney and conway clients*** any case filed on or before feb. 7, 2005 will be subject to the prior agreement***"

The authenticity of the email has not been challenged. Durabla's attorney did not challenge any of the statements made in the email until Mach 5, 2005.

On January 25, 2005, 39 plaintiffs brought motions to compel payment of settlement funds. The record shows ten of the plaintiffs' claims were moot because they were settled and stipulations for dismissal entered. The stipulations were signed by Durabla's current counsel.

In their motion to compel, the plaintiffs contended that, pursuant to the settlement agreement, they had returned to Durabla properly executed releases three to five months earlier. Durabla had not released the settlement funds. The 28 claims at issue were filed prior to the February 7, 2005, cut-off.

On February 23, 2005, Durabla filed a response to plaintiff's motion to compel settlement. In its response, Durabla said:

"A settlement agreement was entered into between Plaintiffs' counsel and then counsel for Durabla Manufacturing Company on April 23, 2003. Pursuant to this agreement, Durabla Manufacturing Company agreed to pay certain sums upon receipt of proof of exposure to Durabla products through an affidavit or interrogatory answers and a medical report or record showing the appropriate diagnosis."

Durabla contended plaintiffs' compliance with the product identification requirement of the settlement was "woefully insufficient." Durabla did not contend Durabla's prior counsel entered into the settlement agreement without authorization.*fn1

In their reply to Durabla's response, plaintiffs attached Exhibit B showing that Durabla sent releases to 128 plaintiffs. Those 128 plaintiffs returned the releases to Durabla, and were issued settlement checks by the ...


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