April 2014 Case Notes & Comments

“My only focus was the Olympics because in my sport, that is the ultimate. Everything is geared toward that, and my entire life was geared around getting there and winning gold.” ~ Cammi Granato

MONTHLY QUIZ: Plaintiff sues Insured-Driver following a car accident and Insurer defends Insured under the automobile policy, which has a per-person indemnity limit of $20,000. Prior to trial, Plaintiff makes a $20,000 policy-limit demand, which Insurer rejects. At trial, a jury finds Insured 60% at fault and Plaintiff 40% at fault and awards Plaintiff a net verdict of $47,951.15, plus costs. Insured then assigns her rights under the policy to Plaintiff, who then sues Insurer for bad faith. In the bad faith case, Plaintiff alleges that Insurer (1) refused to participate in good faith settlement negotiations, refused settlement offers, failed to advise Insured of settlement offers and failed to keep Insured’s interests equal to its own. With regard to liability, Plaintiff alleges that “rather than apply her brakes or attempt to [avoid the collision, Insured] veered directly into [Plaintiff’s] van striking it broadside with a strong impact.” As to damages, Plaintiff alleges that Insurer knew that Plaintiffs’ worker’s compensation lien and medical bills each individually exceeded the $20,000 policy limit. Under these facts and allegations, can Plaintiff sustain a cause of action against Insurer for bad faith? Has Plaintiff pled sufficient facts to withstand a motion to dismiss? You be the judge. (Answer below).

PREMISES LIABILITY - TORT IMMUNITY: Student tripped and fell on an uneven sidewalk on College’s campus and sustained injuries. Student sued College alleging negligence in failing to repair the sidewalk. At deposition, College’s building department Supervisor testified that he alone made the final determination regarding the handling of each sidewalk deviation, that he had unfettered discretion in how and when to make repairs and that there was no set of rules or regulations that he was bound to follow in doing so. College argued that it was entitled to discretionary immunity under sections 2-109 and 2-201 of the Local Governmental and Governmental Employees Tort Immunity Act (Act)(745 ILCS 10/2-109, 2-201), since thehandling of the sidewalk deviation was a discretionary act. Student argued Section 3-102 of the Act applied, that College was not entitled to immunity since the act was ministerial. The Trial Court granted summary judgment in favor of College. In Illinois, whether acts are classified as discretionary or ministerial are depend on the circumstances of a particular case and are determined on a case by case basis. Discretionary acts involve “the exercise of personal deliberation and judgment in deciding whether to perform a particular act or how and in what manner that act should be performed.” Under these facts, the Appellate Court determined that College’s handling of the sidewalk deviation was a discretionary act and not a ministerial one. Because the handling of the sidewalk deviation was both an exercise of discretion and a policy determination, College was entitled to immunity under sections 2-109 and 2-201 of the Act. Richter v. College of Du Page, 2013 IL App (2d) 130095 (Dec. 31, 2013).

WORKERS’ COMPENSATION - USE OF EMPLOYER’S STAIRWELL COMPENSABLE: Claimant was employed by Village as a community service officer. He had a prior right knee accident that was not work related, and he was scheduled for arthroscopic surgery. While walking down the back stairs from a briefing on the second floor of the police station, Claimant’s right knee “gave out” and Claimant fell down several stairs, injuring his right knee and lower back. To obtain compensation under the Act, a claimant bears the burden of showing, by a preponderance of the evidence, that he suffered an injury that had its origin in some risk connected with, or incidental to, the employment. While the Commission found that the knee “giving out” was due to a personal risk, it noted that the claimant’s employment must significantly contribute to the injury with a greater risk of falling. The Commission held that because the Claimant was “continually forced to use the stairway” on numerous occasions during the day for his work activities and for personal comfort (as the locker room and lunch room were on a separate floor), he was at an increased risk in comparison to the general public. As the Commission’s determination of accident was a question of fact, the decision was affirmed on a manifest weight of the evidence standard. Village of Villa Park v. Illinois Workers’ Compensation Comm’n, 2013 IL App (2d) 130038WC (Dec. 31, 2013)

CONSTRUCTION - SCHOOL DISTRICT’S  STATUTE OF LIMITATIONS AGAINST DESIGN-BUILD CONTRACTOR WAS EXTENDED BY CONTRACT LANGUAGE- BUT NOT FAR ENOUGH TO HELP SCHOOL DISTRICT WHOSE BUILDING WAS DESTROYED BY SUBSIDING COAL MINE: In 1998, School District hired design-build Contractor to provide preliminary services, prior to the actual designing and construction of a new school building. As part of that contract, Contractor agreed to perform a “site mine investigation”, to examine the extent of mine subsidence and soil suitability in the area. After reporting on mine subsidence and soil suitability, District signed a second Agreement under which Contractor agreed to act as the architect for the school. Under the Agreement, the parties agreed to replace the “discovery rule” of the statute of limitations with their own definition of “accrual,” so that the applicable statutes of limitation began running at the time of “Substantial Completion” – namely, when the school was completed. The school was finished in the fall of 2002. In March 2009, the school suffered extensive structural damage due to coal mine subsidence and was eventually condemned. District filed suit against Contractor alleging professional negligence, breach of implied warranty, and fraudulent misrepresentation by concealment of material fact. However, since more than six years had passed since the date of “Substantial Completion,” District’s claims for professional negligence and for breach of implied warranty were barred by the four-year construction statute of limitations in section 13-214(a) in the Illinois Code of Civil Procedure (the Code) and the five-year statute of limitations of Section 13-205 applied to School District's claim for fraudulent misrepresentation. All of the School District’s claims were contractually barred. Dismissal affirmed. Gillespie Comm. Unit School Dist. No.7 v. Wight,  2014 IL 115330 (Jan. 24,2014)


ANSWER TO QUIZ: Insurer wins, Plaintiff loses. To sustain a cause of action for bad faith, a plaintiff must allege: (1) the duty to settle arose; (2) the insurer breached the duty; and (3) the breach caused injury to the insured.  In addition, a plaintiff must allege sufficient facts to demonstrate the existence of the duty to settle in good faith. Under the Illinois Supreme Court’s current standard, a pleading is sufficient “when a claim has been made against the insured and there is a reasonable probability of recovery in excess of the policy limits and a reasonable probability of a finding of liability.” As an issue of first impression, the Appellate Court read the Illinois Supreme Court’s pleading standard to require the pleading of facts “which show that liability is at least more likely than not, but not necessarily a certainty.” Though the Appellate Court found that Plaintiff sufficiently pled facts to establish a reasonable probability of recovery in excess of the policy limits, Plaintiff did not plead facts to that would establish a reasonable probability, as opposed to possibility, of liability in the underlying case. Powell v. American Service Insurance Company, 2014 IL App (1st) 123643 (Feb. 18, 2014). 

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