In a politically charged ruling already rankling tort reform advocates, the Illinois Supreme Court has held that defendants in negligence suits who settle prior to trial may not be included on verdict forms when the jury apportions fault among the remaining parties. The landmark opinion alters the financial calculus for deciding whether to settle negligence and strict product liability claims governed by Illinois law. It also sets up a likely showdown in the Illinois General Assembly over amending the state statute governing joint and several liability.
Ready v. United/Goedecke Serv., Inc., Ill. Sup. Ct. No. 103474, was issued November 25, 2008. The decision affirmed a trial court negligence award of $8.137 million against a construction subcontractor after the two other co-defendants in the case had settled before trial. The plurality opinion, written by Justice Charles E. Freeman, held that the state’s joint liability statute, 735 ILCS 5/2-1117, excludes defendants who settle before judgment when it lays out the formal procedure for juries to apportion fault. Thus, the trial court in Ready properly excluded the two settled defendants from the verdict form submitted to the jury. Chief Justice Thomas R. Fitzgerald and Justice Anne M. Burke joined the plurality opinion, while Justice Thomas L. Kilbride wrote a concurring opinion. Justice Rita B. Garman wrote a vehement dissent, joined by Justice Lloyd A. Karmeier. Justice Robert R. Thomas did not take part in the decision.
Summary of the Ready Decision
Plaintiff Terry Ready’s husband, Michael, was killed on the job in 1999 when a scaffolding truss fell on top of him during a construction project. Ready filed a wrongful-death action on behalf of her husband’s estate against the project’s general contractor, BMW Constructors, and its subcontractor, United/Goedecke Services. Ready later added as a third defendant her husband’s employer, Midwest Generation.
Prior to trial, both BMW and Midwest settled with Ready for a total of $1.113 million, leaving United the sole remaining defendant. The trial court subsequently ruled that United could not present any evidence at trial of the settled defendants’ conduct concerning the accident. Further, the trial court refused to allow United to list BMW and Midwest on the jury verdict form, which would have allowed the jury to apportion fault for the death not only to Michael Ready and
United, but also to the employer and the general contractor. The jury ultimately found United liable for negligence, apportioning United’s fault at 65 percent and Ready’s fault at 35 percent. Subtracting Ready’s comparative negligence and the previous settlement payment, the trial court held United liable for $8.137 million. United appealed the decision, arguing that the trial court erred by refusing to include the settled defendants on the verdict form for the jury’s fault calculation. Most importantly, United contended that had the other defendants been included on the form, the jury may have concluded that United was less than 25 percent at fault for the accident. Under 735 ILCS 5/2-1117, that would have made it liable only for its share of plaintiff’s damages, not jointly and severally liable for the entire sum. The First District Appellate Court held that the settled defendants should have been included on the jury verdict form in apportioning fault.
On review in the Illinois Supreme Court, the plurality focused on the proper interpretation of the phrase “defendants sued by the plaintiff” in the joint and several liability statute. According to § 2-1117, “[a]ny defendant whose fault, as determined by the trier of fact, is 25% or greater of the total fault attributable to the plaintiff, the defendants sued by the plaintiff, and any third party defendants who could have been sued by the plaintiff, shall be jointly and severally liable for all other damages.” The plurality found the statute to be ambiguous because reasonable people could read the phrase “the defendants sued by the plaintiff” two different ways—that is, to mean either all the defendants originally sued by the plaintiff or only those defendants still being sued when the case goes to the jury. As evidence, the plurality cited confusion about the phrase in the appellate courts. To determine the proper meaning of the statute, the plurality found it significant that the legislature failed to change the statute after an Illinois appellate court ruled that § 2-117 did not apply to settled defendants. Further, the legislature in 1995 attempted to amend a related statute to specifically include settled defendants, implying that § 2-1117 as currently written excludes settled defendants. Therefore, the plurality concluded that the current statute mandates juries not to consider settled defendants when apportioning fault at the end of a negligence trial.
Justice Kilbride wrote a concurring opinion agreeing with the ultimate result. However, he reasoned that the language of the statute itself resolved any ambiguity, without the court having to resort to legislative intent. Focusing on § 2-117’s grammatical structure, Kilbride declared that the section applies only to defendants still “in” a tort action specified in the section’s first sentence, making a former defendant who previously settled officially “out” of the statute’s reach. Kilbride also cited various dictionary definitions of the word “defendant,” all of which suggested that to be a defendant one must be “required to make answer in an action or suit.” Because settled parties no longer are required to answer in court, Kilbride reasoned that they are no longer “defendants” under the statute.
In a sign of just how contentious statutory interpretation can be, Justice Garman in her dissent also analyzed the section’s grammatical structure but reached the opposite conclusion, finding that the statute’s wording plainly includes all defendants in a case, regardless of whether they settle before the entry of judgment. Justice Garman also criticized the plurality’s use of legislative history from subsequent bills never enacted by the state legislature in discerning the meaning of the original statute.
Critique of Ready v. United/Goedecke Serv., Inc.
As reflected in the fractured decision, this was a difficult case. The Illinois Supreme Court, of course, was supposed to effectuate the General Assembly’s intent in enacting § 2-1117. Theoretically, the justices’ personal views regarding the public policy issues raised by the subject of the litigation should be irrelevant; the policy choices made by the legislature should prevail.
The problem, however, is that the legislative intent is not obvious from the statutory language. The dissent’s careful parsing of the statutory language produces a colorable interpretation, perhaps even the correct one, but as shown by Justice Kilbride’s concurrence, not necessarily the only reasonable interpretation. On the other hand, the plurality’s reliance on bills that were introduced in, but never passed by, the legislature after enactment of the statute in question is inconsistent with established case law frowning on that kind of putative evidence of legislative intent.
The inherently tenuous nature of a result reached by a plurality, and the importance of this issue, warrant passage of legislation that definitively decides the matter. Unless and until that occurs, however, litigants are left to wrestle with the likely fallout from Ready.
Implications of Ready v. United/Goedecke Serv., Inc.
The court’s decision in Ready has practical implications for all defendants in lawsuits governed by Illinois law in which there are negligence or strict product liability claims for bodily injury, death or property damage. Plaintiffs’ lawyers contend that the Ready ruling promotes sound public policy by encouraging all parties to settle claims before they go to trial. However, defense lawyers and tort reform advocates argue that the decision will prompt unscrupulous plaintiffs to selectively settle, rejecting good faith settlement offers from minimally responsible plaintiffs with “deep pockets” in order to keep them in the case until judgment and force them to pay more than their fair share. Under the court’s reading of the statute, critics contend, a plaintiff may settle with the defendants who are most at fault but have the least money. As for the deep pocket defendant who remains in the case, that defendant would not be allowed to have the jury apportion the percentages of fault among all culpable parties. As a result, a party minimally at fault compared to the other defendants would have to pay the entire judgment minus the settlement amount and the plaintiff’s comparative negligence.
The decision also affects cases where there is no comparative negligence by the plaintiff. In that situation, a minimally responsible defendant is more likely to be found jointly and severally liable for the entire judgment amount. According to the statute, a defendant is liable only for its share of the plaintiff’s damages, rather than jointly and severally liable for the plaintiff’s entire damages, only if the jury assesses that defendant’s fault at less than 25 percent. In the aftermath of Ready, any defendant that settles and is removed from a case will lead to increased liability in percentage terms for the other remaining defendants. For example, a defendant that is 20 percent liable in a case with three defendants may become more than 25 percent liable if one of the other defendants settle, and thereby jointly and severally liable for the entire judgment amount.
However, the Ready ruling may not be the unvarnished boon for plaintiffs’ lawyers that many tort reform advocates fear. The requisite jury verdict form surely will increase the potential exposure of remaining defendants after any defendants settle, and thus increase the pressure on the remaining defendants to settle. However, for truly tangential defendants that hold out until trial in a case in which the plaintiff is at least partially at fault, the new verdict form also will increase the likelihood that the jury will find the plaintiff more than 50 percent liable. Thus, while increasing the pressure on non-settling defendants, the decision also raises risks for the plaintiff and the chances of a defense verdict. In cases where the plaintiff bears some culpability, the most likely result from the decision may be increased pressure to settle on both defendants and plaintiffs.
Ready also may lead some plaintiffs that prevail at trial to recover a lesser amount of damages. As pointed out by Justice Garman, a plaintiff that bears some responsibility may be assigned a higher percentage of fault when the responsibility of defendants that settled is ignored. The percentage reduction in the plaintiffs’ recovery at trial would reduce the plaintiffs’ overall recovery.
Another likely consequence of Ready is to spur defendants to exercise increased vigilance over settlement agreements involving other defendants. The Ready decision is premised on settlements taking place in good faith. Savvy defense counsel will be especially watchful in ensuring that any partial settlements fairly apportion the settling defendant’s liability.
The Illinois Supreme Court also apparently left open whether remaining defendants at trial could continue to employ the “empty chair” defense, where a defendant argues to the jury that the more culpable parties in the case are not in the courtroom that day. The appellate court in Ready did not allow United to introduce any evidence of the settled co-defendants’ conduct at trial, and the Illinois Supreme Court did not disturb that aspect of the appellate decision. However, the plurality opinion did not directly address the appropriateness of introducing such evidence at trial. Presumably, evidence of settled co-defendants’ negligent conduct continues to be admissible, at a minimum, if relevant to an argument that the defendant’s conduct was not the proximate cause of the accident at issue.
The Ready decision likely will prompt a campaign in the next General Assembly to clarify the meaning of 735 ILCS 5/2-117 and to revise the existing procedures for joint and several liability in Illinois. Two opposing bills currently are pending in the Illinois House Rules Committee, and the court’s decision in Ready will provide new impetus to the legislative debate.
For now, at least, the Ready ruling presents a tough new environment for deep pocketed defendants in Illinois negligence and strict product liability suits, as they increasingly will have to take their chances before juries and risk paying 100 percent of damages in cases where they have relatively little liability. The outlook may be brighter for more obviously marginal defendants as savvy plaintiffs find it wiser to settle with them and focus on bigger companies with bigger wallets. Ready or not, the parties to such cases had best understand this brave new world.