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Palacios v. Mlot

Court of Appeals of Illinois, First District, Fifth Division

August 2, 2013

GREGORY MLOT and DMD SERVICES, INC., Defendants and Third-Party Plaintiffs-Appellants Michael Dervin, Defendant and Third-Party Defendant-Appellee.

Appeal from the Circuit Court of Cook County Nos. 10 L 64007 and 10 L 7732 Honorable Drella C. Savage, Judge Presiding.

JUSTICE PALMER delivered the judgment of the court, with opinion. Justices McBride and Taylor concurred in the judgment and opinion.



¶ 1 Defendants and third-party plaintiffs, Gregory M. Mlot and DMD Services, Inc., appeal the trial court's dismissal of their third-party complaint for contribution against third-party defendant, Michael S. Dervin. The court had found good faith with respect to Dervin's settlement agreement with plaintiff, Wendy Palacios, pursuant to the Illinois Joint Tortfeasor Contribution Act (Contribution Act) (740 ILCS 100/1 et seq. (West 2008)). On appeal, defendants argue the trial court abused its discretion in finding that the settlement agreement between Palacios and Dervin was made in good faith. We affirm.


¶ 3 Although the parties dispute the facts in this case, the instant appeal arises out of a vehicle collision that occurred on July 31, 2008. Dervin testified in his deposition that he was driving his Chevrolet Astro van with Palacios as a passenger on Interstate 190 near Rosemont, Illinois, at approximately 4:45 or 5 p.m. that day when the accident occurred. According to Dervin, the traffic was heavy and "stop and go" at the time. Their vehicle was in the left-most lane when it was struck from behind by a truck driven by Mlot. Palacios and Dervin testified that the impact pushed their van into the vehicle in front of them, which was a Jeep Liberty driven by Lavita G. Gayle. Palacios and Dervin testified that Mlot admitted at the scene that the accident was his fault. Mlot testified in his deposition that his Ford F-150 truck came into contact with Dervin's van, but he maintained that Dervin's van first hit the Jeep in front of it.

¶ 4 Following the July 2008 vehicle accident, Palacios filed a personal injury action on July 2, 2010, against Mlot, DMD Services, and Dervin. Palacios asserted that Mlot, individually and as an agent of DMD Services, negligently caused his vehicle to collide with the rear of the vehicle in which Palacios was a passenger, causing her severe and permanent injuries which resulted in medical expenses, lost wages, and pain and suffering. Palacios further asserted that Dervin negligently operated the vehicle in which Palacios was a passenger, causing it to collide with the vehicle operated by Mlot, resulting in injuries, expenses, lost wages, and pain and suffering.

¶ 5 On June 25, 2010, Dervin also filed a personal injury action against Mlot and DMD Services, alleging that Mlot negligently caused his truck to rear-end Dervin's vehicle, which caused Dervin severe, permanent physical and psychological injuries, resulting in pain and suffering, lost wages, and medical expenses. Dervin asserted that DMD Services was liable through agency.[1] Defendants denied Dervin's allegations in his complaint and, in an amended answer, raised as an affirmative defense Dervin's alleged contributory negligence in operating his vehicle.

¶ 6 Palacios subsequently moved to dismiss Dervin without prejudice pursuant to section 2-1009 of the Illinois Code of Civil Procedure (the Code) (735 ILCS 5/2-1009 (West 2010)). The trial court granted the motion on August 3, 2010.

¶ 7 On November 9, 2010, Mlot brought a third-party complaint for contribution against Dervin pursuant to the Contribution Act, asserting that Dervin negligently caused his vehicle to strike the vehicle in front of him and come to a sudden stop, which then caused Mlot's vehicle to strike Dervin's vehicle.

¶ 8 On October 31, 2011, Dervin moved for a good-faith finding of settlement with Palacios pursuant to the Contribution Act and to dismiss with prejudice the third-party action against him. Dervin indicated that he reached a settlement agreement with Palacios for $3, 000 under the Contribution Act and that the settlement was the result of arm's-length negotiation. Dervin asserted that (1) he was stopped on the expressway at the time of the collision; (2) Palacios testified that Dervin was stopped and that there was only one impact; and (3) the police report, attached to his motion, indicated that the police officer who later investigated the accident would testify to a past recollection recorded that Mlot failed to reduce speed and admitted fault for rear- ending Dervin's vehicle.[2] In the narrative section of the police report attached to Dervin's motion, the officer wrote that "The driver of Unit 1 [Mlot] stated in summary, traffic was stop [and] go, and he failed to reduce speed to avoid an accident. The driver o[f] unit 1 admitted fault of rear-ending unit 2 [Dervin]. All information was provided by unit 1 and unit 2."

¶ 9 Defendants filed a written objection to Dervin's motion for a good-faith finding on December 6, 2011. Defendants argued that Dervin and Palacios failed to make a preliminary showing of good faith. They asserted that the settlement was collusive given that Palacios and Dervin were coworkers who rode to work together every other month, Palacios voluntarily dismissed Dervin one month after filing suit and less than two weeks after Dervin was served with the lawsuit, and at the time of the agreement, Palacios could no longer reinstitute proceedings against Dervin because one year had elapsed since the voluntary dismissal and the statute of limitations had expired. Defendants also argued that the settlement shifted a disproportionate share of the liability on them because Dervin was the sole proximate cause of the accident and Palacios's disclosed medical costs were $24, 411.04. Defendants attached several supporting exhibits, including Dervin's motion and the depositions of Dervin, Mlot, Palacios, and Gayle. Defendants cited Palacios's deposition testimony that her body first went forward upon initial impact and then went backward; Mlot's deposition testimony that he did not see any brake lights on Dervin's vehicle; and Gayle's testimony that she felt two impacts, with the first impact being harder.

¶ 10 In response, Dervin argued that defendants failed to meet their burden of showing lack of good faith by a preponderance of the evidence. Dervin asserted that the totality of the circumstances supported a good-faith finding, and there was no evidence of unfair dealing, collusion, or wrongful conduct. Dervin argued that Mlot made several admissions in his deposition testimony and to the officer who prepared the police report: (1) Mlot conceded that he did not observe Dervin operating his van in an unusual way; (2) he conceded that he only thought it was a "possibility" that Dervin's van first struck the rear of Gayle's vehicle; (3) he did not hear an impact; (4) he did not recall whether Dervin's van was stopped at the time; and (5) he conceded that he told the officer how the crash occurred. Dervin pointed out that there was no mention of a third car in the police report. Dervin asserted that Palacios voluntarily dismissed him from her lawsuit "[a]fter initial documents were reviewed" and "it became clear that Mr. Mlot took full responsibility for the accident." Dervin argued that it was not collusive for Palacios to dismiss him from the lawsuit given Mlot's admissions and the possibility that Palacios could have been liable for sanctions pursuant to Illinois Supreme Court Rule 137 (eff. Jan. 4, 2013) (pleadings not well grounded in fact or law) had she kept Dervin in the lawsuit. Defendant also asserted that, based on the deposition testimony and Palacios's expenses, Dervin offered Palacios $3, 000 in good faith. He noted that Mlot would be able to present to the jury any defenses he had against Dervin in Dervin's lawsuit against him.

ΒΆ 11 In answer to Dervin's response, defendants maintained that the deposition testimony suggested that Dervin's vehicle hit Gayle's vehicle before Mlot's vehicle rear-ended Dervin's vehicle. Defendants disputed the narrative in the police report, arguing that the officer of the report was never deposed and there was no foundation to use the report as a past recollection recorded. Defendants reiterated that the settlement did not adequately consider Dervin's potential liability, collusion could be inferred ...

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