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Walsh Group, Ltd. v. Geans

Court of Appeals of Illinois, First District, First Division

September 30, 2013

THE WALSH GROUP, LTD., and WALSH CONSTRUCTION COMPANY, d/b/a WALSH CONSTRUCTION OF ILLINOIS, Defendants and Third-Party Plaintiffs-Appellants,
v.
KESHA A. GEANS, Third-Party Defendant-Appellee (Francisco Miranda, as Father and Next Friend of Marco Antonio Miranda, a minor, Plaintiff).

Appeal from the Circuit Court of Cook County No. 11 L 007572 The Honorable William E. Gomolinski, Judge Presiding.

PRESIDING JUSTICE HOFFMAN delivered the judgment of the court, with opinion. Justice Cunningham concurred in the judgment and opinion. Justice Delort dissented, with opinion.

OPINION

HOFFMAN PRESIDING JUSTICE

¶ 1 The defendants and third-party plaintiffs, The Walsh Group, LTD, Walsh Construction Company, d/b/a Walsh Construction of Illinois (Walsh), appealed the circuit court order which found that the settlement between the plaintiff, Francisco Miranda, as Father and Next Friend of Marco Antonio Miranda, and the third-party defendant, Kesha A. Geans, for injuries that Marco Miranda sustained following a vehicular accident with Geans, was made in good faith. The settlement awarded the plaintiff $20, 000, which was the policy limit of Geans' auto insurance policy issued by Universal Casualty Company (Universal). Walsh contends that the circuit court abused its discretion in approving the settlement because it failed to consider the amount of the settlement in relation to the probability of recovery and Geans' potential legal liability. For the reasons that follow, we affirm.

¶ 2 On September 24, 2006, Geans, who was driving while intoxicated, lost control of her vehicle near the intersection of Ogden Avenue and Taylor Street. She struck a concrete jersey barrier located to the right of her vehicle, causing her vehicle to overturn and slide across the center line of Ogden Avenue. Geans' vehicle collided with the Miranda family's car, injuring several members of the family. Marco Antonio Miranda, who was 12 years old at the time of the collision, suffered serious brain injuries which have left him permanently disabled. Geans, whose blood alcohol level was .229, nearly three times the legal limit of .08, eventually pled guilty to one felony count of 4th degree aggravated driving under the influence.

¶ 3 On December 12, 2008, Universal paid the limit of Geans' $20, 000 policy to the plaintiff in exchange for a full release of all claims against Geans and Universal. The release states in relevant part:

¶ 4 "As further consideration for the payment of said sum Claimant agrees to indemnify, protect and save harmless the parties [Geans and Universal] hereby released from all judgments, costs and expenses whatsoever arising on account of any action, claim or demand by [Marco Antonio Miranda], or by any person acting for or on behalf of said minor in respect of the aforesaid injuries or damages."

¶ 5 Subsequently, on November 29, 2010, the plaintiff filed an amended complaint against Walsh, which placed the concrete jersey barrier that Geans struck along Ogden Avenue as part of its construction project to expand a nearby medical center. The complaint stated two nearly identical counts of negligence against Walsh, alleging that it created a dangerous condition by placing the barrier alongside its work site in the direct pathway of oncoming traffic. On February 22, 2011, Walsh filed a third-party complaint for contribution against Geans pursuant to the Illinois Joint Tortfeasor Contribution Act (Act) (740 ILCS 100/1 et seq. (West 2010)), alleging that Geans' reckless driving was the sole proximate cause of the plaintiff's injuries.

¶ 6 On May 3, 2011, Geans filed a motion for involuntary dismissal pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2010)), claiming that her pre-suit settlement with the plaintiff effectively ended her liability as a contributing tortfeasor. On September 16, 2011, Geans filed a motion for a finding that the settlement was made in good faith, as required under the Act. 740 ILCS 100/2 (West 2010). The court allowed limited discovery, granting Walsh permission to depose Geans but denying its other discovery requests. At her deposition, Geans testified that she had no recollection of the events leading up to the collision or of the collision itself. She recalled drinking at a social club on Roosevelt Road at some point on the evening of September 23, 2006. Her next memory was waking up in the hospital handcuffed to her bed. She did not recall what she drank, when she left the club, the route she drove home, the collision, whether she struck the jersey barricade before crossing the center line, or the collision with the plaintiff's vehicle. Geans also testified that she: resided in Chicago Housing Authority property with her 11 year-old child; attended community college classes with the intent of becoming a teacher; had been unemployed since November 2010; last earned $15 per hour in an administrative job; received $455 biweekly from unemployment insurance; and had no assets, such as property, bank accounts, pensions, or savings accounts. Geans further testified that she had had a medical condition, hidradenitis suppurativa, since she was a child, which required frequent surgeries and prevented her from working or attending college for periods of time.

¶ 7 On July 24, 2012, after hearing the parties' arguments, the circuit court stated that, under the Act, it was required to consider the conduct of the party requesting the good faith finding and the public policies that inform the Act. The court determined that there was no evidence of wrongful conduct, collusion, or fraud on the part of Geans or Universal in the pre-suit settlement. The court also identified the two public policies behind the Act: the encouragement of settlement and the equitable apportionment of damages among tortfeasors. The court noted that the fact that a settlement is advantageous to a party is not necessarily an indication of bad faith. The court further stated that the disparity between the settlement amount and the damages sought in the complaint is not an accurate measure of good faith. The court concluded that, because there was no evidence of wrongful conduct, collusion, or fraud and because the full policy limit had been tendered, the settlement was made in good faith. Accordingly, the circuit court granted Geans' motion for involuntary dismissal.

¶ 8 On August 23, 2012, the court granted Walsh's request to add language pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010) to the order granting Geans' motions for a good faith finding and involuntary dismissal. Walsh then timely appealed from that order.

¶ 9 Walsh contends that the circuit court abused its discretion by approving the settlement because it failed to consider the amount of the settlement in relation to the probability of recovery and Geans' potential legal liability. Walsh argues that the court's failure to do so contravenes the purpose of the Act to encourage equitable contribution of damages, because it may now be forced to absorb an unfair portion of the plaintiff's damages, far in excess of the $20, 000 that Geans paid. Further, Walsh argues that it will suffer unjust prejudice if Geans' settlement is accepted because, after the settlement, Geans cannot be named on the jury verdict form for purposes of apportioning fault. See 735 ILCS 5/2-1117 (West 2012); Ready v. United/Goedecke Services, Inc., 232 Ill.2d 372, 905 N.E.2d 725 (2008). Finally, Walsh asserts that the circuit court's decision has the effect of rewarding Geans' drunk driving. We disagree that any of these points justify overturning the circuit court's ruling.

¶ 10 "The 'good faith' of a settlement is the only limitation which the Act places on the right to settle and it is the good-faith nature of a settlement that extinguishes the contribution liability of the settling tortfeasor." Johnson v. United Airlines, 203 Ill.2d 121, 128, 784 N.E.2d 812 (2003). The Act does not define "good faith, " nor does it provide any procedural guidelines as to when or how a good-faith determination is to be made. Id. When deciding whether a settlement was made in good faith, the settling parties carry the initial burden of making a preliminary showing of good faith. Id. at 132. At a minimum, the settling parties must show the existence of a legally valid settlement agreement, although not all legally valid settlements satisfy the good-faith requirements of the Act and the court may need to consider other factual evidence before making its determination. Id. Once the settling parties make a preliminary showing of good faith, the party challenging the good faith of the settlement must prove the absence of good faith by a preponderance of the evidence. Id. When a court decides whether a settlement was negotiated in good faith, it must strike a balance between the two important public policies underlying the Act–the encouragement of settlements and the equitable apportionment of damages among tortfeasors. Id. at 133.

¶ 11 While there is no single, precise formula for determining what constitutes good faith within the meaning of the Act, courts have found that a settlement will not be found to be in good faith if it is shown that the settling parties engaged in wrongful conduct, collusion, or fraud, or if the settlement conflicts with the terms of the Act or is inconsistent with the policies underlying the Act. Id. at 134. Whether a settlement satisfies the good-faith requirement of the Act is a matter left to the discretion of the trial court based upon the court's consideration of the totality of the circumstances. Id. at 135. "Emphasis should not be placed on any single factor." Id. at 139. The fact that a settlement is advantageous to a party is not necessarily an indication of bad faith. Id. at 138. The disparity between the settlement amount and the damages sought in the plaintiff's complaint is not an accurate measure of the good faith of a settlement, and the small amount of the settlement alone does not require a finding of bad faith. Id. at 136-37. Rather, the amount of a settlement must be viewed in relation to the probability of recovery, the defenses raised, and the settling party's potential legal liability. Id. We will not disturb the trial ...


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