IDC Survey of Law Editorial Board

Brad A. Elward, Editor-in-Chief Heyl, Royster, Voelker & Allen, P.C., Peoria Denise Baker-Seal, Managing Editor Brown & James, P.C., Belleville Nicole D. Milos, Managing Editor Cremer, Spina, Shaughnessy, Jansen + Siegert, LLC, Chicago

EDITORS Laura K. Beasley, Joley, Oliver & Beasley, P.C., Belleville Terry A. Fox, Flaherty & Youngerman, P.C., Chicago Linda J. Hay, HeplerBroom LLC, Chicago Donald J. O’Meara, Jr., Pretzel & Stouffer, Chartered, Chicago Kimberly A. Ross, Ford & Harrison LLP, Chicago

Contributors

Denise Baker-Seal Brown & James, P.C. Benjamin J. Barnett SmithAmundsen LLC Andrew Bell Hinshaw & Culbertson LLP Elizabeth K. Barton Ancel Glink Diamond Bush DiCianni & Krafthefer, P.C. Theresa Bresnahan-Coleman Langhenry, Gillen, Lundquist & Johnson, LLC Julie A. Bruch O’Halloran Kosoff Geitner & Cook, LLC Adam C. Carter Cray Huber Horstman Heil & VanAusdal LLC Patrick D. Cloud Heyl, Royster, Voelker & Allen, P.C. Molly P. Connors Brady, Connolly & Masuda, P.C. R. Mark Cosimini Rusin & Maciorowski, Ltd. Anna C. Covert SmithAmundsen LLC James L. Craney Craney Law Group LLC Donald Patrick Eckler Pretzel & Stouffer, Chartered Robert E. Elworth HeplerBroom LLC Jessica S. Holliday Brown & James, P.C. Brian J. Hunt The Hunt Law Group, LLC Howard L. Huntington Bullaro & Carton, P.C. Benjamin M. Jacobi O’Halloran Kosoff Geitner & Cook, LLC Matthew G. Jones Del Galdo Law Group, LLC Gabriel R. Judd HeplerBroom LLC R. Howard Jump Jump & Associates, P.C. Zeke N. Katz HeplerBroom LLC Brad W. Keller Heyl, Royster, Voelker & Allen, P.C. Tara W. Kuchar HeplerBroom LLC Seth D. Lamden Neal, Gerber & Eisenberg LLP Erica S. Longfield Swanson Martin & Bell, LLP Bruce W. Lyon LaBarge, Campbell & Lyon, LLC Brian Myers The Hunt Law Group, LLC John M. O’Driscoll Tressler LLP James W. Ozog Goldberg Segalla LLP Jaime L. Padgett Segal McCambrige Singer & Mahoney, Ltd. Emily J. Perkins Heyl, Royster, Voelker & Allen, P.C. Cecil E. Porter III Litchfield Cavo LLP Jamie M. Rein HeplerBroom LLC Stephanie Rifkind Swanson, Martin & Bell, LLP Kimberly A. Ross Ford & Harrison LLP Kathleen J. Scanlan LaBarge, Campbell & Lyon, LLC Bruce H. Schoumacher Querrey & Harrow, Ltd. Bradley J. Smith Keefe, Campbell, Biery & Associates, LLC W. Scott Trench Brady, Connolly & Masuda, P.C. James D. VanRheeden Quinn, Johnston, Henderson, Pretorius & Cerulo Stephanie W. Weiner HeplerBroom LLC Kenneth F. Werts Craig & Craig, LLC Holly C. Whitlock-Glave HeplerBroom LLC Jennifer A. Winking Scholz Loos Palmer Siebers & Duesterhaus LLP Michael L. Young HeplerBroom LLC contents

4 IDC Officers and Directors 2016–2017 6 President’s Message 7 Letter from the Editors

Survey of Cases

9 Civil Practice Law

12 Construction Law

20 Employment Law

31 Insurance Law

50 Local Government Law

60 Tort Law

92 Index of Cases

100 Index of Advertisers

2016 Survey of Law is published by the Illinois Association of Defense Trial Counsel, Springfield, Illinois. It is published annually as a service to its members. Subscription for non-members is $100. Subscription price for members is included in membership dues. Requests for subscriptions or back issues should be sent to the Illinois Association of Defense Trial Counsel at [email protected]. All materials have been edited and are the property of the Association, unless otherwise noted. Statements or expression of opinions in this publication are those of the contributors and not necessarily those of the Association or Editors.

Illinois Association of Defense Trial Counsel, 2016 Survey of Law, Copyright © 2017 The Illinois Association of Defense Trial Counsel. All rights reserved. Reproduction in whole or in part without permission is prohibited. POSTMASTER: Send change of address notices to IDC Survey of Law, Illinois Association of Defense Trial Counsel, P.O. Box 588, Rochester, IL 62563-0588. Second-Class postage paid at Springfield, IL and additional mailing offices.

IDC 2016 SURVEY OF LAW | 1 2016 – 2017 DIRECTORS Denise Baker-Seal Brown & James, P.C., Belleville Elizabeth K. Barton Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer, P.C., Chicago Laura K. Beasley Joley Oliver & Beasley, Belleville Joseph A. Bleyer Bleyer and Bleyer, Marion Jeremy T. Burton Falkenberg Fieweger & Ives LLP, Chicago 2016 – 2017 OFFICERS Adam C. Carter Cray Huber Horstman Heil & VanAusdal LLC, Chicago PRESIDENT R. MARK MIFFLIN Giffin, Winning, Cohen, & R. Mark Cosimini Bodewes, P.C., Springfield Rusin & Maciorowski, Ltd., Champaign Bruce Dorn PRESIDENT-ELECT MICHAEL L. RESIS Bruce Farrel Dorn & Associates, Chicago SmithAmundsen LLC, Chicago Donald Patrick Eckler FIRST VICE PRESIDENT BRADLEY C. NARHSTADT Pretzel & Stouffer, Chartered, Chicago Lipe, Lyons, Murphy, Nahrstadt & Terry A. Fox Pontikis, Ltd., Chicago Flaherty & Youngerman, P.C., Chicago SECOND VICE PRESIDENT WILLIAM K. McVISK Edward K. Grassé Johnson & Bell, Ltd., Chicago Busse, Busse & Grassé, P.C., Chicago John P. Heil, Jr. SECRETARY/TREASURER NICOLE D. MILOS Heyl, Royster, Voelker & Allen, P.C., Peoria Cremer, Spina, Shaughnessy, Jansen + Siegert LLC, Chicago David A. Herman Giffin, Winning, Cohen & Bodewes, P.C., Springfield Anthony G. Joseph HeplerBroom LLC, Chicago Thomas L. O’Carroll Hinshaw & Culbertson LLP, Chicago Donald J. O’Meara, Jr. Pretzel & Stouffer, Chartered, Chicago Ian Russell Lane & Waterman, LLP, Davenport Benjamin J. Samuelson Betty, Neuman & McMahon, P.L.C., Davenport Tracy E. Stevenson Law Office of Tracy E. Stevenson, P.C., Chicago Patrick W. Stufflebeam HeplerBroom LLC, Edwardsville Michelle M. Wahl Swanson, Martin & Bell, LLP, Chicago EXECUTIVE DIRECTOR Sandra J. Wulf, CAE, IOM

PAST PRESIDENTS Royce Glenn Rowe • James Baylor • Jack E. Horsley • John J. Schmidt • Thomas F. Bridgman • William J. Voelker, Jr. • Bert M. Thompson • John F. Skeffington • John G. Langhenry, Jr. • Lee. W Ensel • L. Bow Pritchett • John F. White • R. Lawrence Storms • John P. Ewart • Richard C. Valentine • Richard H. Hoffman • Ellis E. Fuqua • John E. Guy • Leo M. Tarpey • Willis R. Tribler • Alfred B. LaBarre • Patrick E. Maloney • Robert V. Dewey, Jr. • Lawrence R. Smith • R. Michael Henderson • Paul L. Price • Stephen L. Corn • Rudolf G. Schade, Jr. • Lyndon C. Molzahn • Daniel R. Formeller • Gordon R. Broom • Clifford P. Mallon • Anthony J. Tunney • Douglas J. Pomatto • Jack T. Riley, Jr. • Peter W. Brandt • Charles H. Cole • Gregory C. Ray • Jennifer Jerit Johnson • Stephen J. Heine • Glen E. Amundsen • Steven M. Puiszis • Jeffrey S. Hebrank • Gregory L. Cochran • Rick Hammond • Kenneth F. Werts • Anne M. Oldenburg • R. Howard Jump • Aleen Tiffany • David H. Levitt • Troy A. Bozarth

2 | IDC 2016 SURVEY OF LAW IDC 2016 SURVEY OF LAW | 3 2016-2017 OFFICERS and DIRECTORS

President President-Elect First Vice President Second Vice President Secretary/Treasurer R. MARK MIFFLIN MICHAEL L. RESIS BRADLEY C. WILLIAM K. McVISK NICOLE D. MILOS Giffin, Winning, Cohen SmithAmundsen LLC NAHRSTADT Johnson & Bell, Ltd. Cremer, Spina, & Bodewes, P.C. Chicago Lipe Lyons Murphy Chicago Shaughnessy, Jansen & Springfield Nahrstadt & Pontikis, Ltd. Siegert LLC Chicago Chicago

DENISE BAKER- ELIZABETH K. BARTON LAURA K. BEASLEY JOSEPH A. BLEYER JEREMY T. BURTON SEAL Ancel, Glink, Diamond, Bush, Joley Oliver & Beasley Bleyer and Bleyer Falkenberg Fieweger & Brown & James, P.C. DiCianni & Krafthefer, P.C. Belleville Marion Ives LLP Belleville Chicago Chicago

ADAM C. CARTER R. MARK COSIMINI BRUCE DORN DONALD PATRICK ECKLER Cray Huber Horstman Heil & Rusin & Maciorowski, Ltd. Bruce Farrel Dorn & Associates Pretzel & Stouffer, Chartered VanAusdal LLC Champaign Chicago Chicago Chicago

4 | IDC 2016 SURVEY OF LAW TERRY A. FOX ANTHONY G. JOSEPH BENJAMIN J. SAMUELSON Flaherty & Youngerman, P.C. HeplerBroom LLC Betty, Neuman & McMahon, P.L.C. Chicago Chicago Davenport

EDWARD K. GRASSÈ THOMAS L. O’CARROLL TRACY E. STEVENSON Busse, Busse & Grassé, P.C. Hinshaw & Culbertson LLP Law Office of Tracy E. Stevenson, P.C. Chicago Chicago Chicago

JOHN P. HEIL, JR. DONALD J. O’MEARA, JR. PATRICK W. STUFFLEBEAM Heyl, Royster, Voelker & Allen, P.C. Pretzel & Stouffer, Chartered HeplerBroom LLC Peoria Chicago Edwardsville

DAVID A. HERMAN IAN RUSSELL MICHELLE M. WAHL Giffin, Winning, Cohen & Bodewes, P.C. Lane & Waterman, LLP Swanson, Martin & Bell, LLP Springfield Davenport Chicago

IDC 2016 SURVEY OF LAW | 5 President’s Message

R. Mark Mifflin Giffin, Winning, Cohen & Bodewes, P.C., Springfield

As attorneys and judges, all of us have area of the law will help practitioners and judges understand the an ongoing professional responsibility to significance and application of these developments. I hope and trust stay current with the development of the that you will find thisSurvey informative and useful. law in general and Illinois law specifically. On behalf of the entire IDC organization, I offer sincere thanks The law is constantly adapting to address to all of the authors and editors who have worked together to achieve issues which arise by way of new challenges this great publication. I would also like to specifically recognize and presented by changes in our society and by thank Editor-in-Chief Brad Elward and Managing Editors Denise judicial or legislative shifts in existing law. Baker-Seal and Nicole Milos for their efforts in making this edition The Illinois Association of Defense Trial of the Survey an overwhelming success. The work of all of these Counsel is pleased to publish this 2016 Survey of Law in an effort individuals is clearly reflected in the quality of the end product. to facilitate a concise review of recent changes in a variety of areas Finally, I would also like to thank the sponsors that have ad- of the law. vertised in this Survey to make its publication possible. The IDC The breadth of the articles included this 2016 Survey clearly appreciates your support. I encourage our readers to take a moment demonstrates the involvement of IDC members in every aspect of to recognize these sponsors as they read through this Survey. civil defense litigation and other dispute resolution proceedings. As President of the IDC, I am pleased to commend the 2016 We believe the insight provided by the authors in each respective Survey of Law to each of you.

As attorneys and judges, all of us have an ongoing professional responsibility to stay current with the development of the law in general and Illinois law specifically.

6 | IDC 2016 SURVEY OF LAW Letter from the Editors

Brad A. Elward, Editor-in-Chief Heyl, Royster, Voelker & Allen, P.C., Peoria

Denise Baker-Seal, Managing Editor Brown & James, P.C., Belleville law, insurance, local government law, medical malpractice, torts, and workers’ compensation. These articles highlight some of the Nicole D. Milos, Managing Editor significant developments over the past year that have shaped the Cremer, Spina, Shaughnessy, Jansen + Siegert, LLC, Chicago law and provided nuance to existing precedent. Knowledge of these cases and developments is crucial to enable our members to remain at the forefront of Illinois law and to best serve their clients’ needs.

Knowledge of these cases and developments is crucial to enable our members to remain at the forefront of Illinois law and to best This edition of the annual Survey of Law continues a long line serve their clients’ needs. of high-quality publications devoted to improving the daily law practice of our membership. The Illinois Association of Defense Trial Counsel has long valued continued legal education and a critical The editors wish to thank all of those involved in preparing this responsibility of education is keeping abreast of developments in year’s Survey of Law and recognize their hard work and dedication to our areas of practice. This year’s issue features articles on a variety the IDC and for going above and beyond the call of duty to provide of topics, including civil practice, construction law, employment this valuable tool.

IDC 2016 SURVEY OF LAW | 7 8 | IDC 2016 SURVEY OF LAW Survey of Civil Practice Law Cases

Supreme Court Strikes Down with defense counsel. The Court further held that following that Six-Person Jury Statute limited deposition, counsel for the defendants may speak with the treating podiatrist regarding liability and causation, after which In Kakos v. Butler, the Illinois Supreme Court upheld the the treating podiatrist may be deposed on those issues. The Court judgment of the trial court and found Public Act 98-1132, which found that this procedure, in these unique circumstances related to mandated only six persons in civil juries, unconstitutional. The the relationship between the treating podiatrist and the defendant Court analyzed Article I, Section 13, of the Illinois Constitution, entity, would protect the plaintiff from coaching by defense counsel which provides: “[t]he right of trial by jury as heretofore enjoyed on the issue of damages, while still protecting the attorney-client shall remain inviolate.” The Court looked to the long history of relationship that the treating podiatrist enjoyed with the LLC. The the drafting, debates at the various constitutional conventions, and dissent filed argued for a strict application of the Petrillo doctrine interpretation by the courts of that section and held that the number and for a finding that the defense should have been barred entirely of jurors was central to the right to trial by jury in Illinois. Stretching from speaking with the treating podiatrist. through five iterations of the Illinois Constitution, the Court found that the substantive right to a trial by jury in civil cases means a jury McChristian v. Brink, 2016 IL App (1st) 152674. composed of 12 persons. The debates in the most recent constitu- tional convention in 1970 showed that the delegates believed that they were preserving civil juries comprised of 12 persons. Rejecting Forum Non Conveniens Transfer Denied entreaties by the plaintiffs that the right had been changed when the Because Witnesses Were Scattered courts found that it was improper to bar women from serving, the Even Though Plaintiff Refiled Case Court held that juror sex was a matter of qualification to be a juror, in Foreign Forum not an essential element of the right to a jury itself. The Court also held that the raise in juror pay in PA 98-1132 could not be severed In Decker v. Union Pacific Railroad Company, the Appellate from the reduction in civil jury size and thus struck the entire statute. Court, Fifth District, affirmed the trial court’s denial of defendant’s motion to transfer pursuant to forum non conveniens. The plaintiff, Kakos v. Butler, 2016 IL 120377. a locomotive engineer, was a railroad employee and was injured in a fall when conducting an inspection of a locomotive in Mt. Vernon. The plaintiff originally filed his FELA and Locomotive Inspection Court Finds Some Ex Parte Act claims in Marion County, his home forum, but then voluntarily Communications with Treating Podiatrist dismissed the case and refiled in St. Clair County. The appellate By Defense Counsel are Permitted court noted this re-filing was similar to that in Fennell v. Illinois Under Petrillo Doctrine Central R.R. Co., 2012 IL 113812, in that St. Clair County was the plaintiff’s second choice of forum, but then noted that in this matter, In McChristian v. Brink, the Appellate Court, First District, in an there was testimony and documentary evidence in St. Clair County interlocutory appeal pursuant to Supreme Court Rule 308, ruled that relevant to the plaintiff’s proofs, thereby giving St. Clair County a defense counsel for a podiatrist and defendant LLC may have limited substantial connection to the case. Other trial witnesses and sources ex parte communications with the plaintiff’s treating podiatrist and of proof were found to be scattered among several counties, with designated expert, who is also a member and in control of the LLC, no county enjoying a predominant connection to the litigation. The prior to that podiatrist’s deposition. Weighing the competing interests appellate court also noted that the trial court’s forum non conveni- of the attorney-client privilege and the doctor-patient privilege, the ens analysis was absent in the order, but since the appellate court Court allowed the plaintiff to take the deposition of treating podiatrist was able to examine the factors, it did not reverse the trial court. regarding nature and extent of damages prior to communications — Continued on next page

IDC 2016 SURVEY OF LAW | 9 Survey of 2016 Civil Practice Law Cases (Continued)

The appellate court echoed the Supreme Court’s admonitions to judge. The plaintiff moved for the substitution of judge in the later include all relevant private and public interest factors in the forum case nine days after that judge had granted summary judgment to the non conveniens analysis in order to make a better record of their defendants in the first case. The appellate court noted the plaintiff decision-making processes. did not move for substitution at the “earliest practical moment,” but rather moved shortly after “he learned what fate held in store” in his Decker v. Union Pacific R.R. Co., 2016 IL App (5th) 150116. second action. The judge’s hand had been tipped indicating how he would rule on a substantive issue, and therefore, the absolute right to substitute dissolved because it was no longer timely. Res Judicata Did Not Apply to Bar a Subsequent Action When the Second Colagrossi v. Royal Bank of Scotland, 2016 IL App (1st) 142216. Prong of the Test, the Identity of the Causes of Action, was not Fulfilled A Post Judgment Motion to Amend the In BMO Harris Bank, N.A. v. K & K Holdings, LLC, the Appel- Pleadings Does Not Extend late Court, Second District, affirmed the trial court’s finding thatres the Time for Filing a Notice of Appeal judicata did not bar a second suit against defendants for breach of a When the Motion Does Not Seek to Make written guaranty because although the guaranty was the same, the the Pleadings Conform to the Proofs claims in the two suits arose out of separate transactions. The bank’s claims alleged the breach of loan agreements related to a property in In Brennan v. Travelers Home and Marine Ins. Co., the Ap- DuPage County. The bank had previously filed a complaint against pellate Court, First District, held that a motion for leave to file an defendants in Kane County as well, but for a breach of a written guar- amended complaint filed after the trial court’s granting of a motion anty related to property in Kane County, and the bank was awarded to dismiss did not extend the time for filing a notice of appeal from summary judgment in that case. The bank was awarded summary the judgment entered. In June 2015, the trial court granted the de- judgment in the DuPage County case as well, but before it was final, fendant’s motion to dismiss and plaintiffs thereafter filed a motion to defendants sought reconsideration asserting that res judicata barred reconsider, asking the court for leave to file an amended complaint. the claims under the guaranty because plaintiff had obtained final In October 2015, the court denied the motion and the plaintiffs relief against them in Kane County. The reconsideration motion was promptly filed a notice of appeal. The appellate court held that plain- denied and judgment was entered against defendants. The appellate tiffs’ motion to reconsider did not count as a motion directed against court found that the second prong of the res judicata test was not the June 2015 judgment and did not extend the time for filing the fulfilled—there was not an identity of the causes of action. While notice of appeal. The appellate court found it lacked the jurisdiction there was one guaranty, it was continuing and there were multiple to consider arguments directed against the dismissal, but did have loan transactions, each of which would trigger it. Each loan was jurisdiction to review the October 2015 order denying the plaintiffs found to be a distinct transaction implicating the guaranty. Thus, leave to amend the complaint. The court explained that after judg- res judicata did not bar the second action. ment, a pleading may be amended only to conform the pleadings to the proofs, pursuant to 735 ILCS 5/2-616(c). Because the plaintiffs BMO Harris Bank, N.A. v. K & K Holdings, LLC, 2016 IL App did not seek to make the pleadings conform to the proofs in their (2d) 150923. motion to reconsider, the appellate court had to affirm the judgment denying them leave to file an amended complaint because that motion did not extend the time for filing a notice of appeal. A Party’s Absolute Right to a Substitution of Judge is not Absolute When it is Untimely Brennan v. Travelers Home and Marine Ins. Co., 2016 IL App (1st) 152830. In Colagrossi, v. Royal Bank of Scotland, the Appellate Court, First District, found the trial court properly denied plaintiff’s motion for substitution of judge as of right because he “engaged in impermis- sible ‘judge-shopping.’” The plaintiff had filed two lawsuits three years apart involving the same parties and based on the same set of operative facts. Both were randomly assigned to the same trial

10 | IDC 2016 SURVEY OF LAW About the Authors

Adam C. Carter is a partner with Cray Huber Horstman Heil & VanAusdal LLC in Chicago, Illinois. He focuses his practice When Defendants Failed to Comply With in the areas of product liability, aviation litigation, professional liability, and commercial litigation. Mr. Carter is a member of Discovery Orders for Two Years and then the Illinois Association of Defense Trial Counsel and the Illinois Waited Two Years to File a Petition to Va- State Bar Association. He earned his B.A. cum laude from cate, the Appellate Court Refused to Augustana College in 1998 and earned his juris doctorate cum laude from the University of Illinois College of Law in 2001. Overturn a $1.2 Million Default Judgment He was admitted to the Illinois Bar and United States District Court, Northern District of Illinois in 2001, and has been admitted pro hac vice to defend clients In KNM Holdings, Inc. v. James, the Appellate Court, First in numerous state and federal courts across the country. Mr. Carter is a former Monograph contributor to the IDC Quarterly and currently serves as the Chair District, affirmed the trial court’s entry of a $1.2 million default for the IDC’s Civil Practice Committee. judgment against the defendants due to the defendants’ repeated failure to comply with discovery orders for over two years. The Donald Patrick Eckler is a partner at Pretzel & Stouffer, Chartered, handling a wide variety of civil disputes in state appellate court also noted that the defendants learned of the default and federal courts across Illinois and Indiana. His practice judgment and then waited nearly another two years before filing and has evolved from primarily representing insurers in coverage disputes to managing complex litigation in which he repre- presenting a motion to vacate the judgment pursuant to 735 ILCS sents a wide range of professionals, businesses and tort 5/2-1401. The defendants claim their attorneys’ mistakes and lack defendants. In addition to representing doctors and lawyers, of diligence should not have been held against them. However, the Mr. Eckler represents architects, engineers, appraisers, ac- countants, mortgage brokers, insurance brokers, surveyors and many other appellate court noted that attorney conduct does not justify relax- professionals in malpractice claims. ing the due diligence requirements on the parties, as they have a responsibility to follow their case as well. Bradley J. Smith is the managing attorney for civil litigation at Keefe, Campbell, Biery & Associates, LLC. He focuses his practice on the defense of premises liability, employer liability, KNM Holdings, Inc. v. James, 2016 IL App (1st) 143008. and general liability claims. Mr. Smith earned his J.D. at the Valparaiso University School of Law and his undergraduate degree at Indiana University.

Plaintiff’s Liability Experts’ Affidavits civil practice committee Containing Speculative Evidence were Stricken and Summary Judgment was Adam C. Carter, Chair Upheld in a Premises Liability Action Cray Huber Horstman Heil & with No Eyewitnesses VanAusdal LLC, Chicago 312-332-8505 In Berke v. Manilow, the Appellate Court, First District, upheld [email protected] the trial court’s granting of summary judgment on behalf of the de- fendant in a premises liability case. The plaintiff fell in the vestibule Donald Patrick Eckler, Vice Chair of an apartment building where he was staying with friends. How- Pretzel & Stouffer, Chartered, Chicago ever, there were no eyewitnesses to his fall. The plaintiff’s complaint 312-578-7653 alleged that an improper design and maintenance of the vestibule, stairs, and the doorway proximately caused his injuries, including [email protected] quadriplegia as a result of his fall. The trial court properly entered summary judgment for the defendants, as the plaintiff presented no MEMBERS Denise Baker-Seal Brown & James, P.C. evidence other than speculative assertions through expert affidavits C. Wm. Busse, Jr. Busse, Busse & Grassé, P.C. that he fell because defendants created and maintained condition Dan T. Corbett O’Halloran Kosoff Geitner & Cook, LLC Bret Franco Kopon Airdo, LLC exposing plaintiff to unreasonable risk of injury. The appellate court Mitch M. Gilfillan Quinn Johnston Henderson Pretorius & Cerulo further upheld the trial court’s striking of the plaintiff’s experts’ af- Edward T. Graham, Jr. Beavers Graham & Calvert Anthony G. Joseph HeplerBroom LLC fidavits because the affidavits and the assertions therein depended William K. McVisk Johnson & Bell, Ltd. on inadmissible and speculative evidence, and because the affidavits R. Mark Mifflin Giffin, Winning, Cohen & Bodewes, P.C. Thomas L. O’Carroll Hinshaw & Culbertson LLP were not compliant with Illinois Supreme Court Rule 191. Gregory W. Odom HeplerBroom LLC Gary S. Schwab Heyl, Royster, Voelker & Allen, P.C. Bradley J. Smith Keefe, Campbell, Biery & Assocates, LLC Berke v. Manilow, 2016 IL App (1st) 150397. J. Matthew Thompson Heyl, Royster, Voelker & Allen, P.C. Eliina Marie Viele-Pritzker CNA Christine Yurchik Bruce Farrell Dorn & Associates Maura Yusof Heyl, Royster, Voelker & Allen, P.C.

IDC 2016 SURVEY OF LAW | 11 Survey of Construction Law Cases

The Implied Warranty of Habitability contributed to the physical construction of the new home. Therefore, Does Not Apply to Architects, according to the court, the Minton extension of the implied warranty and May Be Disclaimed by Conspicuous doctrine was based on the unique dependence a purchaser has in the Contract Language contractor’s ability to build a sound structure. The court explained that purchasers do not have an equivalent relationship with architects In Board of Managers of Park Point at Wheeling Condominium because architects do not engage in construction. Association v. Park Point at Wheeling LLC, the Illinois Appellate With regard to the second issue on appeal, the court held that Court, First District, reviewed an appeal from the dismissal of a the condominium purchase contract disclaimer language properly condominium association’s claims against the architect, developer- waived the implied warranty against the developer-seller, but not seller, general contractors, and subcontractors arising out of alleged against the general contractors or subcontractors. The court found latent defects that caused property damage to condominium units the disclaimer language to be conspicuous as to the developer- and common elements. Specifically, the association alleged it expe- seller, because it was explicit in purpose and consequences, and rienced water and air infiltration caused by flawed masonry walls, the language was one of only two sections in the entire agreement windows, patio doors, flashing, caps, and dams. The association— to feature all capitalized letters. Moreover, despite the association’s which represented homeowners in a complex consisting of three contentions, the court reaffirmed that Illinois law does not require midrise buildings and 128 units—asserted that the total damages sellers to specifically point out a disclaimer in a written contract as were in excess of $4 million. long as it is conspicuous. On appeal, the association raised two issues for review: first, On the other hand, the court reversed the dismissal of the general whether an implied warranty of habitability claim could be asserted contractors and subcontractors because the disclaimer only applied against the architect by extending Minton v. Richards Group of to the “seller (and its owners, officers, agents, and other representa- Chicago, 116 Ill. App. 3d 852 (1st Dist. 1983); and, second, whether tives).” The lower court found that the contractors constituted agents language featured in the condominium purchase contracts disclaimed or representatives of the developer-seller; however, the appellate the implied warranty against the developer-seller, general contrac- court was unconvinced. The appellate court held that allegations in tors, and subcontractors. the association’s complaint alone were insufficient to establish that The appellate court affirmed the dismissal of the implied war- the contractors were agents or representatives. Therefore, the court ranty of habitability claim against the architect. After providing a reversed the dismissal of the contractors and remanded. thorough overview of the development of the implied warranty under Illinois law, the court concluded that implied warranty claims center Board of Managers of Park Point at Wheeling Condominium Ass’n on the provision and quality of construction work. The court settled v. Park Point at Wheeling, LLC, 2015 IL App (1st) 123452. on two specific principles undergirding that conclusion: one, the implied warranty has been traditionally applied to those who engage Implied Warranty of Habitability Claims in construction; and two, architects do not engage in construction. As Cannot Be Raised Against Architects such, the court reasoned, generally “only builders or builder-sellers warrant the habitability of their construction work.” Alternatively, In a consolidated appeal from three Cook County condominium architects and other design professionals merely “provide a service associations, the First District affirmed separate circuit court judg- and do not warrant the accuracy of their plans and specifications.” ments holding that causes of action for breach of implied warranty The court was not persuaded by the association’s attempt to of habitability cannot be brought against architects under Illinois law analogize its case to Minton, where the first district extended the even when the developer-vendors are insolvent. The appellate court implied warranty to the subcontractor that caused the alleged latent decision came after three circuit court judges independently reached defect after the purchaser had no recourse against an insolvent the same conclusion, foreclosing the plaintiffs’ shared argument. builder-seller. The court distinguished the case at bar from Minton Despite the different circumstances underlying the cases, the by emphasizing that the subcontractor painting company in Minton first district resolved the consolidated appeal with consideration

12 | IDC 2016 SURVEY OF LAW of a single issue: whether Minton should be extended to permit finding that the lien claimant, a home improvement contractor, had a breach of implied warranty claim against an architect when the committed constructive fraud when it filed a mechanics lien claim. developer-vendor of a condominium complex is insolvent. The first The claimant supported its lien claim with an affidavit that conflicted district reviewed the relevant lower court proceedings, Illinois case with affidavits filed later by the claimant in the foreclosure action. law on the implied warranty of habitability, and the first district’s Among the evidence relied on by the appellate court was claimant’s earlier decision in Board of Managers of Park Point at Wheeling statement in an affidavit, that work was completed on September Condominium Ass’n v. Park Point at Wheeling, LLC, 2015 IL App 12, 2009, when the claimant later admitted that it started work after (1st) 123452, and determined Minton should not be extended. September, 2009. The court also noted that the amount alleged due In so doing, the court agreed with the Park Point at Wheeling in the lien claim was not even due for payment until after the claim analysis, and concluded that architects are not subject to breach of had been filed. The appellate court also affirmed the trial court’s implied warranty of habitability claims under Illinois law. Because award of attorneys’ fees to the homeowners pursuant to Section 7 nothing in the procedural history of the three cases indicated that of the Mechanics Lien Act, 770 ILCS 60/7, and attorneys’ fees to the defendants were engaged in construction, the appellate court the mortgagee under Illinois Supreme Court Rule 137. affirmed the judgments in favor of the architects. Father & Sons Home Improvement II, Inc. v. Stuart, 2016 IL App Board of Managers of the Film Exchange Lofts Condominium Ass’n (1st) 143666. v. Fitzgerald Associates Architects, P.C., 2016 IL App (1st) 113508-U. Court Finds Wind Farm Tower Was Surveyor May Qualify as Not a Fixture of the Real Property; Valid Mechanics Lienholder Rejects Mechanics Lien Claim

In Christopher B. Burke Engineering, Ltd. v. Heritage Bank of The Illinois Appellate Court, Second District, affirmed the Central Illinois, the Illinois Supreme Court held that a surveyor could trial court’s judgment that a subcontractor’s mechanics lien claim, perfect a valid mechanics lien claim against property for a survey, against the property on which the tower stood, was invalid. The preparation of a plat and other engineering services for the property. wind farm developer purchased an easement from the owners of the When the surveyor was not paid, it recorded a mechanics lien against property for construction of the tower. The subcontractor assisted in the property pursuant to Section 1 of the Mechanics Lien Act, 770 the erection of the tower. When the subcontractor was not paid, it ILCS 60/1, and filed suit to foreclose on its lien. Article 1 states in filed a mechanics lien claim and suit to foreclose on said lien. The part that an architect, structural engineer, professional engineer, property owners and general contractor were named as defendants. land surveyor or property manager may file a mechanics lien claim The owners filed a Rule 2-619 motion to dismiss the complaint and for services performed “in, for or on a lot or tract of land.” At the the general contractor filed a motion for summary judgment. The time the developer had abandoned the project, and the surveyor’s trial court’s dismissal of those parties was upheld by the Illinois design had not been constructed on the property. The circuit court Appellate Court. and the Illinois Appellate Court, Third District, denied the lien The central issue on appeal was whether the subcontractor’s claim, holding that the surveyor could not prosecute its lien claim work constituted an improvement to real property (which is lienable) because the land had not been physically improved. The Supreme or only a trade fixture (which is not lienable). In its opinion, the Court reversed, finding that the surveyor did not need to show any appellate court noted that the most important factor in determining physical improvement to the property. the same was the intent of the parties. The appellate court noted that the easement agreement specifically stated that the tower was the Christopher B. Burke Engineering, Ltd. v. Heritage Bank of Central property of the developer and that the developer would remove the Illinois, 2015 IL 118955. tower within three months of notice of termination of the easement by the property owners. The court found the easement was sufficient Mechanics Lien Claim Denied for to show that the parties did not intend to treat the tower as a perma- Constructive Fraud; Court Awards nent land improvement, and affirmed dismissal of the defendants. Attorneys’ Fees AUI Construction Group, LLC v. Vaessen, 2016 IL App (2d) 160009. In Father & Sons Home Improvement II, Inc. v. Stuart, the Illinois Appellate Court, First District, affirmed the trial court’s — Continued on next page

IDC 2016 SURVEY OF LAW | 13 Survey of 2016 Construction Law Cases (Continued)

First District Confirms That a Sudden The appellate court also rejected the plaintiffs’ argument that and Dangerous Occurrence is a Requisite their claims were not barred by the economic loss doctrine because Element of the “Other Property Damage” the damage to their floors was caused by contamination. After re- Exception to the Economic Loss Doctrine viewing the Illinois Supreme Court’s holding in Board of Educ. of City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428 (1989), the court In Hecktman v. Pacific Indemnity Co, the Illinois Appellate explained that the A, C & S decision was unique to its facts, and held Court, First District, affirmed the trial court’s dismissal of the plain- that there is no independent contamination exception to the economic tiff’s complaint as barred by the economic loss doctrine pursuant loss doctrine. The court further held that, even if contamination was to 735 ILCS 5/2-619.1. The plaintiffs—a husband and wife—had actionable, the plaintiffs failed to allege that the contamination of purchased three combined, unfinished condominium units on the their units with excess humidity was dangerous. nineteenth floor of a residential tower. The plaintiffs had hardwood floors installed by a contractor who was not a party to the appeal. Hecktman v. Pacific Indemnity Co., 2016 IL App (1st) 151459. Thereafter, portions of the hardwood floors began to warp, prevent- ing doors from opening and causing the floor to be uneven. The plaintiffs filed construction negligence claims against the First District Expands Homeowner’s developer of the residential tower, as well as the general contractor Rights to Sue Absent Privity of Contract and numerous subcontractors who built the tower, alleging that the tower’s curtain wall system and ventilation system were inadequately In Board of Managers of the 1120 Club Condominium Ass’n v. designed and constructed, such that they failed to remove humidity 1120 Club, LLC, a consolidated appeal, the Illinois Appellate Court, from the ambient air in the tower and the plaintiffs’ units. The trial First District, reversed the lower court’s finding that a plaintiff could court dismissed the plaintiffs’ negligence claims for failure to state not directly sue a down the line general contractor with whom it a claim because they were barred by the economic loss doctrine. On lacked privity when it still had recourse against the developer (its appeal, the plaintiffs argued that their claims met the requirements direct contractor who filed bankruptcy). The appellate court also of one of the exceptions to the economic loss doctrine because they reversed the lower court’s finding that the developer could not alleged damage to “other property” (i.e. their hardwood floors), retroactively achieve standing to bring a claim against the general which was separate from the allegedly defective curtain wall and contractor, when the bankruptcy trustee had not yet abandoned the ventilation systems. claim at the time the developer initially brought the claim. The appellate court confirmed that the purpose of the economic In considering its decision in 1324 W. Pratt Condominium loss doctrine is to distinguish between the types of damages that Ass’n v. Platt Construction Group, 404 Ill. App. 3d 611 (1st Dist. are the subject of contract law as opposed to tort law. Tort law is 2010) (Pratt I), the appellate court held that a homeowner may assert designed to address personal injury or property damage sustained as breach of implied warranty claims against parties with whom the the result of a sudden or dangerous occurrence, whereas contract law homeowner is not in privity of contract, regardless of the solvency is designed to address damages sustained as a result of defeated com- status of the developer and whether the homeowner has recourse mercial expectations. The court further confirmed that, in order for against the developer. The appellate court found that to require the plaintiff to invoke the “other property” exception to the economic homeowners to first pursue the developer, prior to pursuing the en- loss doctrine, the plaintiff had to establish both of the following ele- tity typically most responsible for any defects (such as the builder/ ments: (1) personal injury or damage to other property and (2) that general contractor), was untenable. the damage was caused by a sudden, dangerous or calamitous event. According to the appellate court, a homeowner’s direct claim The appellate court noted that the plaintiffs alleged only that their for breach of implied warranty against a builder/general contractor floors became damaged gradually over time from excess humidity. with whom it lacked privity was not governed by Minton v. Rich- Accordingly, the appellate court found that the plaintiffs failed to ards Group of Chicago, 116 Ill. App. 3d 852 (1st Dist. 1983), but, allege a sudden, dangerous or calamitous event that could enable rather, Pratt I. The appellate court noted that the Minton court only them to invoke the exception to the economic loss doctrine. The addressed subcontractors, and did not expand Minton’s holding in appellate court further found that, although the floors were installed light of Pratt I. The appellate court opined that in light of Pratt I, by the plaintiffs after the tower was built, the floors were part of the the lower court’s determination that the plaintiff was precluded from structure, such that the damage to the floors was merely incidental a direct action against the down the line general contractor due to to the qualitative defects in the tower, as opposed to the product of plaintiff’s pursuit of the developer’s insurance proceeds, constituted a sudden or dangerous occurrence. error and warranted reversal.

14 | IDC 2016 SURVEY OF LAW Next, the appellate court concluded that even if the developer In Pepper Construction Co. v. Palmolive Tower Condominiums, lacked standing at the time it filed suit against the general contrac- LLC, the appeal involved a dispute between general contractor, tor due to its bankruptcy, standing can be regained nunc pro tunc Pepper Construction Co, and one of its subcontractors, Bourbon through the bankruptcy trustee’s assignment of the claim. The ap- Marble, Inc. relative to build-out work at a condominium build- pellate court held that even if the bankruptcy trustee did not assign ing owned by Palmolive Tower Condominiums. Disputes initially the claim to the developer until after suit had been filed, standing arose between Pepper and Palmolive, resulting in Pepper filing an re-vests back to the onset of the case, as if the developer never lost arbitration demand. standing in the first place. Prior to arbitration, Pepper and various subcontractors, includ- Based on the appellate court’s perceived errors, the case was ing Bourbon, entered into a joint interest and liquidating agreement remanded back to the Circuit Court of Cook County. A Petition for (JILA) whereby Pepper and the subcontractors agreed to pursue their Leave to Appeal to the Illinois Supreme Court has been filed. interests, jointly, at the arbitration. According to the JILA, Pepper and its subcontractors agreed that it was most efficient/cost effective Board of Managers of the 1120 Club Condominium Ass’n v. 1120 to present the subcontractors’ claims as part of Pepper’s claim in Club, LLC, 2016 IL App (1st) 143849. arbitration. At arbitration, it was determined that Palmolive breached its contract with Pepper and damages were awarded to Pepper. The arbitrators further stated that Bourbon was not a party to the arbitra- When Must the Kotecki Defense tion in that its claims were not specifically addressed at arbitration be Presented? and it participated in arbitration only to assist Pepper in presenting Pepper’s claims (related to Bourbon’s work) against Palmolive. In Burhmester v. Steve Spiess Construction, Inc., the Illinois The circuit court entered an order confirming the arbitration Appellate Court, Third District, addressed two issues regarding award, and Palmolive appealed, which was subsequently dismissed the application of the Kotecki doctrine: (1) whether Kotecki is an after Pepper, Palmolive, and various subcontractors (not including affirmative defense that must be pled or a posttrial claim for setoff; Bourbon) entered a global settlement. and (2) whether an affidavit setting out the workers’ compensation Following arbitration, Bourbon filed breach of contract claims benefits paid is enough to prove theKotecki claim. against Pepper, and Pepper filed a counterclaim for set off/back- With regards to the first issue, the appellate court held that charges. The circuit court addressed judicial estoppel, res judicata Kotecki does not have to be pled and proven at trial as an affirmative and collateral estoppel raised by the parties relative to the issues defense but rather can be presented in a posttrial motion. However, previously addressed in arbitration. After entering partial summary it is important to note that the court’s holding was seemingly limited judgment on the same, the circuit court ultimately ruled in favor to cases in which there is no dispute that the underlying plaintiff of Pepper, awarding it limited damages for Bourbon’s breach of was an injured employee receiving workers’ compensation benefits, contract. Both parties appealed. such as was the case in Burhmester. On appeal, the appellate court reversed the circuit court’s grant- On the second issue, the affidavit presented by the employer’s ing of summary judgment to Pepper on the basis of judicial estoppel. insurer included evidence relative to the settlement contract and a The circuit court confirmed judicial estoppel applies to statements “payout screen” exhibit showing specific details of the amounts paid of fact not legal opinions/conclusions; and the parties’ allegations in compensation and medical benefits. The appellate court found that regarding one another’s liability (based on representations made at said affidavit was sufficient to establish the amount of compensation the arbitration) were legal conclusions. Further, the parties’ stances paid by the employer, thus proving its Kotecki claim. on liability were inconsistent throughout the arbitration and court proceedings, therefore constituting material issues of fact. Burhmester v. Steve Spiess Construction, Inc., 2016 IL App (3d) Relative to res judicata, the appellate court found that the circuit 140794. court correctly concluded that res judicata did not apply in that Bour- bon’s dispute with Pepper was not decided at arbitration, and because Bourbon’s claims derived from different operative facts. Further, the First District Clarifies Requirements appellate court found that collateral estoppel did not bar Bourbon’s for Judicial and Collateral Estoppels claims against Pepper due to Bourbon and Pepper not having been and Res Judicata Between “true adversaries” in the arbitration proceeding and Bourbon not General- and Sub-Contractors having had the capacity to control its claims in arbitration such that — Continued on next page

IDC 2016 SURVEY OF LAW | 15 Survey of 2016 Construction Law Cases (Continued) it would be fair to preclude it in the circuit court. Thus, the circuit for its own negligence and the contractors’ endorsement specifically court correctly found the collateral estoppel did not apply. excluded coverage for the negligence of any additional insured. In In summary, the Appellate Court for the First District of Illinois the alternative, Pekin argued that although its policy’s exclusion reversed the trial court’s grant of summary judgment to Pepper based for bodily injuries contained an exception for an insured contract, on judicial estoppel and affirmed the circuit court’sres judicata and the lease agreement between Abel and Designed did not qualify as collateral estoppel rulings. an insured contract; or, if it did, it was void under the Construction Contract Indemnification for Negligence Act. Pepper Construction Co. v. Palmolive Tower Condominiums, LLC, The appellate court agreed with the circuit court’s finding that 2016 IL App (1st) 142754. the lease agreement was an insured contract based on the language of the indemnity provision, however the lease agreement was found to involve “work dealing with construction,” thus bringing it under There is No “Magic Word” That Brings the purview of the Act and rendering it void as against public policy. an Indemnification Agreement Within The appellate court held that an insured’s indemnification obligation, the Purview of the Construction Contract for which coverage might otherwise be had under the policy as an Indemnification for Negligence Act “insured contract,” was void under the Act despite the lack of the word “construction” in the agreement. Specifically, the appellate In Pekin Insurance Co. v. Designed Equipment Acquisition court stated that it found no case law to support that there is a magic Corp., the appellate court held that an insured’s indemnification word that must be used in an agreement in order to bring it within obligation for an insured contract (a lease agreement for rental the purview of the Act. The appellate court explained that the leas- of scaffolding equipment), was void under Illinois’ Construction ing of scaffolding equipment by a building restoration company can Contract Indemnification for Negligence Act despite the fact that the be reasonably interpreted as being for the “construction, alteration, lease agreement did not contain the work “construction.” repair or maintenance” of a building or structure or “other work Abel Building & Restoration leased scaffolding equipment dealing with construction.” from Designed Equipment Acquisition Corp. and purchased a li- ability policy from Pekin Insurance Company. The lease included Pekin Insurance Co. v. Designed Equipment Acquisition Corp., 2016 an indemnification provision that required Abel to indemnify and IL App (1st) 151689. defend Designed against all injuries “caused or claimed to be caused, in whole or in part, by the equipment leased herein or by the liability or conduct…of [Designed].” Evidence that General Contractor Retained In the underlying lawsuit filed by an Abel employee against Control Over Snow Removal on Roof Designed, said employee alleged injuries sustained while working Defeats Motion for Summary Judgment at a project where Designed provided/erected scaffolding equip- ment. Designed tendered its defense to Abel’s insurance company, In Larson v. Ephraim, the Illinois Appellate Court, First District, who in turn rejected the tender of defense. Pekin acknowledged the reversed summary judgment granted in favor of general contractor, indemnity provision in the lease agreement between Designed and United Insulated (United), finding sufficient evidence that it retained Abel, but claimed that such contracts involving construction were responsibilities for safety at the jobsite, and affirmed summary void as against Illinois public policy pursuant to the Construction judgment in favor of property owner, Modern Process Equipment Contract Indemnification for Negligence Act. (Modern Process). Pekin filed a declaratory judgment action, seeking declarations Modern Process hired United as a general contractor for a relative to its obligations under the relevant insurance policies, as a construction project to expand a Chicago factory. United then sub- result of its dispute with Designed. The circuit court granted Pekin’s contracted with Lino & Poli Plumbing (Lino & Poli) for the plumbing motion for summary judgment, denying coverage for Designed. work at the project. The plaintiff was employed by Lino & Poli as a On appeal, Designed argued that the Act should not apply to plumber. The plaintiffsustained injuries when he fell off of a snow void the insured contract because the contract at issue was a straight- covered roof at the jobsite. The plaintiff claimed he was told to go forward agreement for the rental of equipment, not a construction onto the roof by United’s superintendent to meet with the roofers to contract within the meaning of the Act. Both parties admitted that the discuss installation of stacks for the plumbing system. lease did not contain the word “construction.” Pekin argued, in part, In the circuit court, the plaintiff alleged United was liable under that Designed was not entitled to coverage because it had been sued section 414 of the Restatement (Second) of Torts and common law

16 | IDC 2016 SURVEY OF LAW negligence for his injuries because United failed to provide him for mechanical installations for the project, and IMI subcontracted with a safe work place. He also claimed Modern Process, as the with Jameson Sheet Metal (Jameson) to fabricate and install heating landowner, was liable under section 343 and common law negli- and ventilation equipment for the project. The plaintiff, a Jameson gence for failing to protect him against unreasonable risks of harm. employee, sustained back injuries while unloading a truck. He According to the contracts, the subcontractors were responsible for brought a lawsuit against IHC and IMI based on Section 414 and the safety of their own employees and the means and methods of common law negligence, alleging they failed to provide a safe their work. United, relying on its contracts with the subcontractors, workplace relative to Section 414. The appellate court held summary unsuccessfully argued it did not exercise supervisory control over judgment was proper since the plaintiff failed to provide evidence the plaintiff’s work. that IHC or IMI retained supervisory control over Jameson’s work. The first district examined the actual work practices of the par- The evidence showed Jameson was left to decide what it needed ties at the jobsite. The appellate court found that the plaintiff had for labor, materials, equipment, services, supervision, tools, and produced sufficient evidence that an issue of genuine fact existed scaffolding. Jameson also made its own decisions about how its relative to whether United owed him a duty in that United assumed employees unloaded the flatbeds. supervision for snow removal from the roof at the jobsite. One of Relative to common law negligence, the appellate court held United’s owners testified it was responsible for making sure the summary judgment was proper since the plaintiff failed to provide roof was safe for subcontractors. This testimony was supported evidence that the defendants controlled, oversaw or gave instruc- by the testimony of Daniel Ephraim, president of Modern Process, tions to Jameson for delivery, movement or unloading steel elbows who said he relied on United to make the facility safe when there from its truck. The plaintiff argued that the sequencing of material were snow and ice conditions. Further, the evidence indicated that deliveries and installation caused his injuries. The appellate court United acted in accordance with a change order, on many occasions, found that the facts showed the plaintiff loaded the Jameson box that authorized it to remove snow from the roof. For these reasons, truck at a Jameson facility, drove the box truck to the work site and the appellate court reversed summary judgment granted in favor of unloaded it with the assistance of two other people. The plaintiff was United due to the existence of a genuine issue of material fact as to injured when he pushed on a steel elbow which was an activity only whether United properly utilized its supervisory control and owed involving Jameson employees and separate from the sequencing of the plaintiff a duty. subcontractors’ activities. Next the first district affirmed summary judgment in favor of Wojcik v. IHC Construction Companies, LLC, 2016 IL App (1st) Modern Process and Ephraim since there was insufficient evidence 152462-U. to create a genuine issue of fact that they undertook any obligation to ensure the snow was cleared and/or the roof was safe, or that it knew or should have known about the snowy conditions on the roof The Illinois Supreme Court Interprets at the time of the plaintiff’s fall. Restatement Sections 411, 414, and 343 Relative to a Landowner’s Negligent Larson v. Ephraim, 2016 IL App (1st) 151223-U. Hiring and Supervision of an Independent Contractor’s Performance and the Scope of Third Party Liability First District Affirms Summary Judgment and Assesses Sufficiency Worksite Safety The issue in Carney was whether a landowner may be found Control Evidence liable for injuries suffered by an independent contractor under § 414 of the Restatement (Second) of Torts under the “retained In Wojcik v. IHC Construction Companies, LLC, the Illinois control theory” where the landowner did not hire or supervise the Appellate Court, First District, affirmed summary judgment against independent contractor. The case also involves an interpretation of the plaintiff due to the plaintiff’s failure to provide evidence that § 411 of the Restatement (Second) of Torts (Negligence in Selec- presented genuine issues of material fact relative to retained control tion of Contractor) and § 343 (Dangerous Conditions Known to and a breach of duty by defendants or Discoverable by Possessor), sections regarding the scope of the IHC Construction Companies, LLC (IHC) was a general con- landowner’s liability, for negligent hiring. tractor for a project at the Metropolitan Water Reclamation District Union Pacific Railroad sold certain out-of-service bridges to of the Greater Chicago Calumet project site in Chicago. IHC had Happ’s Inc. for demolition. Happ’s hired Carney Group to assist in a subcontract with Independent Mechanical Industries, Inc. (IMI) — Continued on next page

IDC 2016 SURVEY OF LAW | 17 Survey of 2016 Construction Law Cases (Continued) the demolition process, of which the plaintiff, Patrick Carney, was an employee. The plaintiff was injured during the demolition pro- About the Authors cess due to an unforeseen condition in the steel plating beneath the Benjamin J. Barnett is an associate at SmithAmundsen ground’s surface at the end of the bridge. He sued Union Pacific for LLC, where he focuses his practice in on the defense of construction, premises liability, and commercial litigation negligent site supervision, negligent hiring, and premises liability. claims.. Mr Barnett received his J.D. from the Loyola The contract between Union Pacific and Happ’s stated Happ’s University Chicago School of Law and his B.A. from the would provide “all superintendence, labor, tools, equipment, ma- University of Wisconsin-Madison. While in law school, he served as the Editor in Chief of the Loyola University terials and supplies and all other things requisite and necessary” to Chicago Law Journal, and was a member of the American Bar Association remove three bridges. However, the agreement also provided that National Appellate Advocacy Moot Court Team. all work to be performed by Happ’s was to be completed to Union Anna C. Covert is an Associate Attorney with Smith- Pacific’s satisfaction and the acceptance of a railroad representative. Amundsen LLC, where her practice focuses on construc- Union Pacific retained the right to stop the work or make changes in tion and commercial litigation. Her areas of practice the work, and to terminate the contract immediately if Union Pacific include construction negligence, complex commercial litigation, breach of contract, construction defect, prem- deemed the work unsatisfactory. ises liability and various other types of negligence actions. The trial court granted summary judgment in Union Pacific’s Ms. Covert graduated from Loyola University Chicago favor, finding, among other things, that Union Pacific did not exercise School of Law in 2014, and received a dual degree in Business Adminis- tration and International Studies from the University of Missouri-Columbia control over the operative details of the demolition. The appellate in 2011. While in law school, she served as a Staff Editor and the Lead court reversed, finding that there was a question of material fact as Articles Editor for the Consumer Law Review. Additionally, she participated to whether the railroad retained sufficient control over the demolition on the Civil Law Mock Trial team where she competed in the ABA Labor and Employment competition in Chicago. Ms. Covert is currently a coach of project. In regard to the premises liability claim, the court found that the Civil Law Mock Trial Team, a member of the Chicago Bar Association, there was a question of fact as to whether the injury was foreseeable. the Women’s Bar Association of Illinois, and the American Bar Association. The court did not address the scope of Union Pacific’s potential li- Robert E. Elworth is a partner in the Chicago office of ability for negligent hiring under § 411 of the Restatement. HeplerBroom LLC. Mr Elworth concentrates his practice The Illinois Supreme Court affirmed the circuit court’s order in insurance-related claims, with a particular focus on the defense of litigation against insurance producers. He granting summary judgment in favor of the defendant. The court also specializes in post-trial and appellate practice. He found that the contract and other construction documents did not is licensed in Illinois, Nebraska and California and is a evince an intent by Union Pacific to retain control over Happ’s work member of the IDC Amicus Committee and the Appellate Lawyers Association. under § 414. The court held that a general right to enforce safety does not amount to retained control. Furthermore, the right to stop Brian J. Hunt is the managing principal of The Hunt the work, to tell the contractors to be careful and to change the way Law Group, LLC, and a trial lawyer, in Chicago, Illinois. His practice focuses on the defense of corporations and something is being done if the defendant felt something was unsafe, individuals in the areas of construction liability, premises likewise do not establish sufficient control. liability, transportation and product liability. Mr. Hunt ob- As to § 411, the court agreed with the trial and appellate courts tained his BBA from The University of Michigan’s Ross Business School in 1986 and graduated magna cum that a fact question existed as to whether the defendant failed “to laude, with high distinction, from The University of Illinois exercise reasonable care to employ a competent contractor.” Nev- College of Law in 1991. Mr. Hunt is a member of The Illinois Association of ertheless, the court concluded that the plaintiff was not a “third Defense Trial Counsel and The Council on Litigation Management. person” to whom the duty recognized in § 411 applies, because as Brad W. Keller is an associate in the Peoria office of an employee of Carney Group, which had partnered with Happ’s, Heyl, Royster, Voelker & Allen, P.C. He concentrates his he was outside the protected class of “third persons” owed a duty practice on civil litigation defense in the areas of trucking/ transportation, casualty, and commercial litigation. He under the section. The court distinguished the plaintiff’s status from received his B.A. in Political Science from the University members of the general public, who would be uninvolved in the of Illinois in 2007 and his J.D. magna cum laude from construction process. University of Illinois College of Law in 2010. As to § 343, the court found that, because the defendant did not build the bridge, did not possess the plans for the bridge, and Bruce W. Lyon is a founding partner of LaBarge, Campbell & Lyon, LLC. He received his undergraduate did not use the bridge, the trial court did not err in entering sum- degree from St. Olaf College and graduated, with mary judgment. honors, from DePaul University College of Law in 1984. Mr. Lyon has represented clients in a variety of civil matters including construction litigation, products liability, Carney v. Union Pacific R.R. Co., 2016 IL 118984.

18 | IDC 2016 SURVEY OF LAW trucking, commercial litigation, and toxic torts. Mr. Lyon has received an AV many programs. He is a Fellow of the American College of Construction rating from Martindale-Hubbell and was selected by his peers as a Leading Lawyers, past Chair of the Construction Law Section of the Illinois State Bar Illinois Attorney as published in Law and Leading Attorneys. Association, past President of the Society of Illinois Construction Attorneys and Secretary of the Chicago Building Congress. Brian Myers is an associate at The Hunt Law Group, LLC, specializing in the defense of construction defect, Stephanie W. Weiner is an associate at HeplerBroom construction negligence, products liability, premises li- LLC in its Chicago and Crystal Lake, Illinois offices. Her ability and transportation liability litigation. Mr. Myers has practice focuses on defense of complex, multi-party com- experience trying cases to verdict in the Circuit Court of mercial construction litigation involving construction injury, Cook County and the United States District Courts, as construction defects, automobile and trucking litigation, well as appellate experience in Illinois. He graduated cum insurance litigation, risk transfer, construction contract, laude from DePaul University College of Law in 2011 risk management, and general liability coverage issues. and graduated with departmental honors from Miami University’s Farmer She earned her B.S., with honors, from University of School of Business in 2008. Illinois, Urbana-Champaign and earned her J.D. from Loyola University, Chicago. She is admitted to practice in Illinois and Wisconsin. Ms. Weiner Cecil E. Porter III has over more than 12 years of litigation is an active member of the Illinois Association of Defense Trial Counsel experience in state courts, federal courts and adminis- and IDC Construction Law Committee member. trative agencies. He has represented clients in actions involving construction site accidents, premises liability, Holly C. Whitlock-Glave is an associate at HeplerBroom auto liability, personal injury, workers’ compensation, LLC in Crystal Lake, Illinois. She primarily focuses her employers’ liability, contract disputes, criminal actions practice in the defense of complex, multi-party commer- and probate actions. Mr. Porter is an active member of cial construction litigation involving construction injury, the Trial Bar of the U.S. District Court for the Northern construction defects, risk transfer, construction contract, District of Illinois. His defense practice is in the areas of general liability, risk management, general liability coverage issues, expert construction litigation, employers’ liability, contractual disputes, premises analysis and investigations and settlement negotiations/ liability and workers’ compensation. From1 201 through 2015, Mr. Porter alternative dispute resolution. She earned her B.A. cum was selected as an Illinois Rising Star by Illinois Super Lawyers, a desig- laude from Augustana College and earned her J.D. cum laude from North- nation representing the top 2.5% percent of all lawyers in Illinois that are ern Illinois University Law School. She has been admitted to practice in 40 years of age or younger. From 2015 through 2016, he was selected the State of Illinois and U.S. District Court, Northern District of Illinois. Ms. by Illinois Leading Lawyers, a Law Bulletin Publishing Company, as an Whitlock-Glave is an active member of the Illinois Association of Defense Emerging Lawyer in the practice areas of commercial litigation and general Trial Counsel and IDC Construction Law Committee member. personal injury defense.

Jamie M. Rein is an associate at HeplerBroom, LLC in CONSTRUCTION law committee Crystal Lake, Illinois. She primarily focuses on her prac- tice in the areas of construction contract and risk transfer, construction litigation, complex civil and commercial litiga- tion, commercial general liability coverage, municipal and Patricia J. Hogan, Co-Chair government law as well as commercial and residential Cassiday Schade LLP, Chicago real estate. Ms. Rein earned her B.A. from Illinois State University and earned her J.D. from John Marshall Law 312-444-1665 School. She has been admitted to practice in the State of Illinois, State of [email protected] Illinois Supreme Court, and U.S. District Court, Northern District of Illinois. Ms. Rein is an active member of the Illinois Association of Defense Trial Counsel and the McHenry County Bar Association. Aleen R. Tiffany, Co-Chair Kathleen J. Scanlan is a senior associate at LaBarge, HeplerBroom LLC, Crystal Lake Campbell & Lyon, LLC, and has been with the firm since 2010. Ms. Scanlan concentrates her practice in construc- 815-526-4810 tion litigation, premises liability, medical malpractice, in- [email protected] surance coverage, and general insurance defense. She is an active member of the Chicago Bar Association and the Illinois Association of Defense Trial Counsel. Ms. Scanlan earned her B.A. from Villanova University in 2007, graduating magna cum MEMBERS laude, and her J.D. from Loyola University Chicago School of Law in 2010. Mark J. McClenathan Heyl, Royster, Voelker & Allen, P.C. Cecil E. Porter, III Litchfield Cavo LLP Bruce H. Schoumacher is a shareholder in the Chicago Lindsay D. Brown Cassiday Schade LLP office of Querrey & Harrow, Ltd. He practices in the C. Wm. Busse, Jr. Busse, Busse & Grassé, P.C. areas of construction law, commercial law and profes- R. Mark Mifflin Giffin, Winning, Cohen & Bodewes, P.C. sional liability. He has authored in whole or part eight Jamie M. Rein HeplerBroom LLC booksn o construction law, written numerous articles on construction law and spoken on construction law on Bruce H. Schoumacher Querrey & Harrow, Ltd. John J. Vitanovec, IV Cassiday Schade LLP

IDC 2016 SURVEY OF LAW | 19 Survey of Employment Law Cases

Seventh Circuit Reverses District Court on court reversed the district court’s decision and entered a verdict Gender Discrimination Claims in the plaintiffs’ favor.

In Ernst v. City of Chicago, five women were denied employ- Ernst v. City of Chicago, 837 F.3d 788 (7th Cir. 2016). ment as paramedics with the Chicago Fire Department because they failed a physical-skills exam. In 2000, the City of Chicago changed its hiring process for paramedics to include a physical-skills test. Conduct Must Be Objectively Considered From 2000 to 2009, approximately 1,100 applicants took the exam, Harassment for Title VII Same-Sex including 800 men and 300 women. 98% of the male applicants Harassment and Retaliation Claims passed while only 60% of the female applicants passed the exam. Five women who were denied employment for failing the test filed In Lord v. High Voltage Software Inc., the Seventh Circuit suit against the City under Title VII for gender discrimination, upheld the district court’s ruling that the plaintiff failed to provide claiming (1) the City implemented the test to prevent women from sufficient facts to survive summary judgment on a hostile work being hired (disparate-treatment claims); and (2) even if the test environment claim based on Title VII same-sex harassment and was not meant to discriminate, it had a disproportionate effect on retaliation claims. The male plaintiff claimed that in January 2007, female applicants and did not accurately measure job-related skills his coworkers teased him about his interest in a female coworker. (disparate-impact claims). The case proceeded to a jury trial on In June 2007, the plaintiff formally complained about this behavior the disparate-treatment claim, and a bench trial on the disparate- to his employer. The employer determined that the conduct did not impact claim, which resulted in defense verdicts on both counts. amount to sexual harassment, but told the plaintiff to report any fur- The plaintiffs appealed. ther harassment immediately. In July 2007, the plaintiff reported to With regard to the disparate-treatment claims, the appellate the employer that he was sexually harassed after a coworker touched court held that a key jury instruction was improper. The relevant part his buttocks and grabbed him between the legs. The plaintiff did of the jury instruction read, “[t]o determine that a Plaintiff was not not report the conduct until 12 days after he was first touched and hired because of her gender, you must decide that the City would three days after the last unwanted contact. The next day, the plain- have hired the Plaintiff had she been male but everything else had tiff was disciplined for an unrelated event. He was then terminated been the same.” The jury instruction misstated the plaintiffs’ burden. the following day for (1) not immediately reporting harassment as According to the Seventh Circuit, a proper jury instruction should instructed; (2) tracking coworkers’ conduct; and (3) insubordination. address whether the City had a discriminatory motive behind its con- The U.S. District Court for the Northern District of Illinois granted duct. Since this instruction focused on gender rather than the City’s the employer’s motion for summary judgment on the plaintiff’s motivation for creating the skills test, the instruction was improper. harassment and retaliation claims. In the bench trial on the disparate-impact claims, the district On appeal, the Seventh Circuit affirmed the decision. With court determined that the test was sufficiently job-related. The sub- respect to the plaintiff’s sex harassment claim, the Seventh Circuit ject test focused on three skills, which were correlated with three found that the plaintiff did not have a cause of action for sexual ha- work samples. Federal regulations require that physical-skills tests rassment, as the alleged harassment was not based on the plaintiff’s be valid, meaning that they predict actual on-the-job performance. sex. The court determined that there was no evidence to infer that the On appeal, the Seventh Circuit listed various errors with the City’s plaintiff was harassed because of his sex: there was no inference that design and administration of the test. Of the three work samples, the alleged harasser’s behavior was “indicative of sexual arousal” at least two were not valid. Due to this lack of validation, the and the jokes did not “reflect a general hostility to the presence of court held there was a “lack of connection between real job skills men in the workplace,” as the plaintiff could not show that only and tested job skills” which was “fatal to Chicago’s case.” The males were subjected to the teasing. The court explicitly rejected the methodology in designing and implementing a physical-skills test plaintiff’s argument that the conduct amounted to sexual harassment must be in compliance with federal regulations. Accordingly, the simply because the conduct had sexual undertones.

20 | IDC 2016 SURVEY OF LAW The court likewise found that the plaintiff failed to establish a in a statute that does not define the term, courts interpreting the prima facie case of retaliation on multiple grounds. First, the court statute must infer that Congress meant to incorporate the established determined that plaintiff did not engage in protected activity when meaning of the term with reference to common-law agency doctrine. he complained of the alleged harassment. In order to engage in pro- The Board ruled that it has the statutory authority to treat student tected activity, the complainant must have a reasonable belief that assistants as statutory employees, where they perform work, at the he is “opposing an unlawful practice.” If the belief is unreasonable, direction of the university, for which they are compensated. It stated and if the conduct does not entail a motive prohibited by Title VII, that under the very broad statutory definition of both “employer” the complaint does not qualify. Because there was no evidence of a and “employee” under the Act, coupled with the Act’s unequivocal prohibited motive, the plaintiff’s belief that he was reporting sexual policy “to encourage the practice and procedure of collective bar- harassment was unreasonable from an objective standpoint. gaining” and “to protect the exercise by workers of full freedom of The plaintiff’s retaliation claim also failed because he was association, self-organization, and designation of representatives of unable to show causation between the complaint and the adverse their own choosing,” it was appropriate to extend statutory cover- actions. While the plaintiff supported his assertion of retaliation with age to students working for universities unless there were strong suspicious timing, the employer was able to rebut the plaintiff’s as- reasons not do so do. sertion, as its reasons for disciplining and terminating the plaintiff were non-retaliatory, including the employer’s decision to terminate the plaintiff for not immediately reporting the alleged conduct. Judge Rover dissented as to the grant of summary judgment The Board ruled that it has the on the retaliation claim. Judge Rover believed that the majority’s statutory authority to treat student holding that an employer can terminate an employee for not imme- assistants as statutory employees, diately reporting harassment could present a “chilling effect on the reporting of harassment” and provide employers with avenues to where they perform work, at the avoid claims of retaliation. He also believed the plaintiff’s complaint direction of the university, for which constituted protected activity. they are compensated.

Lord v. High Voltage Software, Inc., 839 F.3d 556 (7th Cir. 2016).

The Board disagreed with and overruled an earlier NLRB deci- University Student Assistants are sion, Brown University, which held that graduate assistants cannot be Employees Under the NLRA statutory employees because they are primarily students and have a primarily educational, not economic, relationship with their univer- In The Trustees of Columbia University in the City of New York sity. The Brown University Board had held that Section 2(3) of the and Graduate Workers of Columbia—GWC, UAW, the National Act must not be examined in isolation; rather, the Board must look Labor Relations Board (NLRB or Board) reversed the Regional to the underlying fundamental premise of the Act—that the Act was Director’s decision that a unit of students who provide teaching designed to cover economic relationships. The Columbia University and research-related services to Columbia University could not be Board agreed that the Act is designed to cover a particular type of found to be employees of the schools, and remanded to the Regional “economic relationship”—and specified that this was an employ- Director for further appropriate action. The Board held that student ment relationship. The Columbia University Board stated that the assistants who have a common-law employment relationship with Brown University Board’s error was to frame the issue of statutory their university are statutory employees and entitled to protections coverage not in terms of the existence of an employment relation- under the National Labor Relations Act (Act). The Board applied ship, but rather on whether some other relationship between the that standard to student assistants, including assistants engaged in employee and the employer is the primary one—a standard neither research funded by external grants. The Board considered the “broad derived from the statutory text of Section 2(3) of the Act nor from language” of Section 2(3) of the Act, which provides that the term the fundamental policy of the Act. The Board pointed out that the “employee” shall include any employee, subject to certain exceptions Board and the courts have repeatedly made clear that the extent of —none of which address students employed by their universities. any required “economic” dimension to an employment relationship The Act does not offer a definition of the term “employee” itself, is the payment of tangible compensation, which suffices to establish but the Board noted that when Congress uses the term “employee” — Continued on next page

IDC 2016 SURVEY OF LAW | 21 Survey of 2016 Employment Law Cases (Continued) an employment relationship for purposes of the Act. The Board thus of employment for falsifying business records. Ortiz sued Werner rejected the Brown University Board’s focus on whether student Enterprises under 42 U.S.C. § 1981 and the Illinois Human Rights assistants have a “primarily educational” employment relationship Act, 775 ILCS 5/1-101 to 5/10-104, claiming that he was terminated with their universities. The Board also determined that applying the because of his Mexican ethnicity and that he was subjected to a Act to student assistants would not infringe upon First Amendment hostile work environment. academic freedom, and that empirical evidence of graduate student On appeal, the Seventh Circuit put a death knell to the “use of collective bargaining at several universities across the country disparate methods and the search for elusive mosaics [which] has demonstrated it is possible to successfully navigate delicate topics complicated and sidetracked employment-discrimination litiga- near where the university’s role as educator and employer intersect. tion for many years.” Ortiz v. Werner Enterprises, Inc., 834 F.3d Given this evidence and the Board’s experience with similar mat- 760, 764 (7th Cir. 2016). The court reversed eleven prior Seventh ters, the Board determined it was appropriate to exercise jurisdiction Circuit decisions (including one as recent as July 14, 2016) to the over student assistants. The Board concluded that affording student extent such opinions rely on “convincing mosaic” as a governing assistants the right to engage in collective bargaining will further legal standard. Practitioners be warned, the court further stated that the policies of the Act, without engendering any cognizable, coun- “[f]rom now on, any decision of a district court that treats this phrase tervailing harm to private higher education. as a legal requirement in an employment-discrimination case is The dissent believed the relationship between Columbia and subject to summary reversal, so that the district court can evaluate the student assistants was primarily educational, and agreed with the evidence under the correct standard.” Ortiz, 834 F.3d at 765. the Brown University Board’s majority reasoning that graduate The proper legal standard in discrimination cases is “whether student assistants who are admitted into, not hired by, a university the evidence would permit a reasonable fact finder to conclude that are not “employees.” This reasoning was based on the students the plaintiff’s race, ethnicity, sex, religion, or other proscribed fac- having a relationship with their school that is primarily academic, tor caused the discharge or other adverse employment action.” All rather than economic. In the dissent’s view, Congress enacted the relevant evidence must be considered as a whole without regard to Act with a focus on conventional workplaces, not universities, and whether the evidence is direct or indirect. The court then went on to the Board’s majority engaged in an analysis that was too narrow, reverse ten prior Seventh Circuit decisions which separated “direct” excluding everything that is unique about college and university from “indirect” evidence and proceeded as if they were subject to students. The dissent predicted that under the Board’s majority different legal standards. In making this ruling, the court clarified decision, student assistants and universities can now resort to using that its opinion had no effect on the burden-shifting framework of “economic weapons” such as strikes, lockouts, suspension, or delay McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), which is of academic credit when disputes arise, and that such weapons will sometimes referred to as an “indirect” means of proving employ- necessarily negatively impact the college experience of all students. ment discrimination. Following this proper standard, the court found that in light of The Trustees of Columbia University in the City of New York and anti-Hispanic comments by management and Ortiz’s evidence that Graduate Workers of Columbia – GWC, UAW, 364 NLRB No. 90 others engaged in similar practices without being terminated, a rea- (2016). sonable juror could infer that the supervisors did not like Hispanics and tried to pin heavy losses on Ortiz to force him out the door, and when that did not work, they terminated him for using techniques Death to the “Convincing Mosaic” Test in that were tolerated when practiced by non-Hispanic freight brokers. the Seventh Circuit Because of conflicting evidence on material facts, the Seventh Circuit reversed summary judgment on the discriminatory termination claim Courts within the jurisdiction of the Court of Appeals for the and remanded the case for a jury trial. Seventh Circuit may no longer use “convincing mosaic” as a legal In light of the Ortiz decision, attorneys drafting motions for test or standard to determine whether there is sufficient evidence summary judgment in employment discrimination cases based on in an employment discrimination test pursuant to Ortiz v. Werner federal law must be careful to avoid using the term “convincing Enterprises, Inc. Courts are also precluded from separating “direct” mosaic” or analyzing the evidence by separating direct and indirect and “indirect” evidence when analyzing summary judgment mo- evidence. Attorneys should also use caution when citing any of the tions. In Ortiz, a Mexican freight broker was fired after seven years reversed Seventh Circuit decisions and should avoid reference to

22 | IDC 2016 SURVEY OF LAW the now improper analyses employed in those decisions. Rather, court held the district court properly dismissed the plaintiffs’ claim each piece of evidence should be looked at in terms of whether such that Kurtz violated the IWA. The court found the IWA only applies evidence would permit a reasonable fact finder to conclude that the to employees, not prospective employees. Therefore, it did not ap- plaintiff’s protected status caused the adverse action. ply to the plaintiffs because they were never employed by Kurtz.

Ortiz v. Werner Enterprises, Inc., 834 F.3d 760 (7th Cir. 2016). Volling v. Kurtz Paramedic Services, Inc., 840 F.3d 378 (7th Cir. 2016).

Seventh Circuit Allows Retaliation Claim Even Though the Plaintiffs Did Not Apply to Reasonable Accommodations Will Not Work for the Defendant Always Trump Seniority System Established by a Collective Bargaining Agreement In Volling v. Kurtz Paramedic Services, Inc., the Court of Ap- peals for the Seventh Circuit held the plaintiffs’ retaliation claims In Dunderdale v. United Airlines Inc., the Court of Appeals under Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. for the Seventh Circuit held that United Airlines (United) was not § 2000e—3(a), and the Illinois Human Rights Act (IHRA), 775 ILCS required to provide a position of employment to a disabled employee 5/1-101, should not have been dismissed, even though the plaintiffs as a reasonable accommodation, when doing so would violate a never applied to or worked for the defendant. The plaintiffs, Shannon collective bargaining agreement (CBA) seniority status system. Volling and Allen Springer, worked as EMTs for Metro Paramedic The plaintiff was employed as a ramp serviceman with United. The Services, Inc. (Metro) and its contractor, Antioch Rescue Squad conditions of employment as a ramp serviceman were governed by (ARS). In 2011, Volling filed sexual harassment, discrimination, and a CBA, between United and the local union. The CBA allowed ramp retaliation charges against Metro and ARS with the Equal Employ- servicemen to bid for placement to different work areas throughout ment Opportunity Commission, and subsequently filed a complaint United. Once bidding was complete, the CBA required United against them in the United States District Court for the Northern to place the servicemen according to their seniority. In 2005, the District of Illinois. Volling also brought allegations of misconduct plaintiff was placed under a permanent work restriction, and United to the Illinois Department of Public Health, which resulted in an assigned him to the Matrix position, which involved the use of a investigation, fines, and EMT license suspensions. Springer filed computer. Traditionally, United’s policy had been that the Matrix a supporting declaration in Volling’s lawsuit and aided the Illinois position was only available to ramp servicemen with permanent Department of Public Health in its investigation. In 2012, ARS work restrictions. United subsequently learned through the union terminated its subcontract with Metro, ending the employment of that non-disabled ramp servicemen had questioned their inability to the EMTs working for Metro. The same day, Metro contracted with bid for the Matrix position. As a result, United changed its policy in Kurtz Paramedic Services, Inc. (Kurtz) to provide EMTs. Kurtz 2011 to allow all ramp servicemen to bid for the Matrix position. In instructed all of the former Metro EMTs how to apply to work for April of 2011, the plaintiff was informed that he no longer held suf- Kurtz, except for Volling and Springer. Consequently, Volling and ficient seniority to retain his position at the Matrix, and was placed Springer did not apply to Kurtz, but all of the other former Metro on extended illness status. The plaintiff requested assignment to EMTs were quickly hired by Kurtz. various positions that were not subject to the bidding process, but the The plaintiffs filed suit against Kurtz and ARS, alleging retalia- requests were denied as there were no vacancies in those positions. tion claims under Title VII, the IHRA, and the Illinois Whistleblower The plaintiff filed suit against United, alleging discrimination Act (IWA), 740 ILCS 174/1. The district court dismissed the claims and retaliation under the Americans with Disabilities Act (ADA). because the plaintiffs never applied to or worked for Kurtz. The The plaintiff argued that from 2005 to 2011, United failed to accom- Court of Appeals for the Seventh Circuit reversed and found that modate his disability when it removed him from the Matrix position. the plaintiffs adequately pled an adverse employment action against The district court granted summary judgment in favor of United, Kurtz under Title VII and the IHRA, even though they did not ap- holding that United had not failed to accommodate the plaintiff’s ply to Kurtz. The court stated the plaintiffs’ claims were adequate disability. Affirming the trial court, the Seventh Circuit explained because they pled ARS and Kurtz collaborated to retaliate against the that absent special circumstances, it is unreasonable to assign an plaintiffs by excluding them from the application process. Finally, the — Continued on next page

IDC 2016 SURVEY OF LAW | 23 Survey of 2016 Employment Law Cases (Continued) employee to a position as an accommodation, where doing so would CDL, and because the plaintiff had held the position for four years violate the employer’s seniority system. The plaintiff argued that without the need to drive a bus, there was sufficient evidence to special circumstances existed in his case, because the Matrix posi- support the jury’s verdict. tion was previously reserved for disabled employees, and United had changed its policy. The appellate court disagreed, noting that Brown v. Smith, 827 F.3d 609 (7th Cir. 2016). United was attempting to keep its policies consistent with the CBA’s seniority system. The plaintiff also argued that he was qualified to perform several no-bid positions despite his work restriction. The Equitable Relief is Sufficient to Award appellate court observed that under the ADA, while an employer Attorney Fees and Costs in Retaliation Case may have to assign an employee to a different position as a reason- able accommodation, this duty extends only to vacant positions, In Mendez v. Town of Cicero, a jury found in favor of the plaintiff and the plaintiff had not shown that there were any such vacancies. on a retaliation claim under the Illinois Human Rights Act, 775 ILCS 5/1-101. While the jury declined to award monetary damages, the Dunderdale v. United Airlines, Inc. 807 F.3d 849 (7th Cir. 2015). court ordered that the plaintiff be reinstated to her prior position of employment. The circuit court awarded attorney fees in the amount of $330,412. The defendant appealed the award of fees, arguing that Whether Job Description Requirement is because the plaintiff was only a “nominal victor,” she was not entitled Essential Function of Position is to attorney fees. The first district disagreed with the defendant’s Issue of Fact for Jury position, finding that the recovery of monetary damages is not the only purpose of the Act, and as such, monetary damages are not In Brown v. Smith, the plaintiff was a long-time employee of the needed for an award of attorney fees. The appellate court noted that City of Anderson Transit System (CATS). He was also a supporter simply because a plaintiff is victorious does not mean the plaintiff of the local Democratic party. Early in his career with CATS, the can recover the entire amount of the claimed fees, as several factors plaintiff had been a bus driver, and held a commercial driver’s license should be considered when awarding fees, including: “the novelty (CDL). Later in his career, the plaintiff developed insulin-dependent and difficulty of the legal question, the time and labor required, the diabetes and was forced to relinquish his CDL. He subsequently skill necessary to perform the legal services properly, the plaintiff’s held a position with CATS for several years as a mechanic’s helper. failure to prevail on claims unrelated to the successful claims, and the The formal job description for mechanic’s helper required a CDL, amount involved and the results obtained.” The court also cautioned however CATS provided plaintiff an exemption from that require- that defendants who aggressively defend a case under the Act are ment. Plaintiff was subsequently promoted to a street-supervisor “not well-positioned to criticize the correspondingly greater fees a position, which also required a CDL, though no CDL exemption plaintiff is required to incur to pursue her claims.” was put in place. Shortly after the election of a Republican mayor, plaintiff’s position was terminated. The termination notice stated that Mendez v. Town of Cicero, 2016 IL App (1st) 150791. the reason for termination was plaintiff’s inability to obtain a CDL, as required in the job description. The plaintiff was awarded dam- ages at trial, after a jury determined that a CDL was not an essential Employer’s Waiver of Non-Compete Provision function of the job position. On review, the defendant argued that the Not Enforceable on Pay-Out Provision trial court erred in submitting the “essential function” question to a jury, rather than resolving it as a matter of law. The appellate court In Reed v. Getco, LLC, the first district affirmed the circuit explained that the essential function inquiry is a factual question, court’s entry of summary judgment in favor of the plaintiff-employee not a question of law. Factors a jury may consider in evaluating the on the plaintiff’s breach of contract claim. In Reed, the plaintiff- question include the requirements of the written job description, employee and the defendant-employer executed an agreement, the employer’s judgment as to which functions are essential, the which stated that the defendant would pay monies in exchange for amount of time spent on the job performing the function, and the the plaintiff abiding by a non-compete agreement in the event the work experience of past incumbents on the job. Because there was employment ended. The non-compete provision stated that the de- testimony that the plaintiff’s supervisors knew he did not have a fendant “shall be under no obligation to modify the restrictions [of

24 | IDC 2016 SURVEY OF LAW the non-compete provision], but may do so in its sole and absolute because the promise the defendant made to pay the plaintiff the discretion.” Reed v. Getco, LLC, 2016 IL App (1st) 151801, ¶ 4. The non-compete monies was absolute, and the right vested when the contract also indicated that a waiver or modification was not valid agreement was signed. The court again agreed with the plaintiff, by either party unless signed in writing by the party against whom finding that two promises were made: (1) the plaintiff would not the waiver/modification would be enforced. engage in competitive employment practices for a specified period When the plaintiff resigned, the defendant sent correspon- of time; and (2) the defendant promised to pay money. Because the dence, indicating that the non-compete covenant was waived, and defendant promised to pay the money, the court concluded there that the plaintiff could work for any employer effective immedi- was no duty to mitigate damages. ately. The correspondence also stated that the plaintiff would not receive any non-compete monies. The plaintiff filed suit, claim- Reed v. Getco, LLC, 2016 IL App (1st) 151801. ing—in part—breach of contract. On cross-motions for summary judgment, the circuit court granted the plaintiff’s motion, and the defendant appealed. Mandatory Arbitration Agreement Violates The defendant argued that the non-compete agreement was ex- Employees’ Right to Engage in Concerted clusively for the defendant’s benefit, which required no waiver from Activity under National Labor Relations Act the plaintiff. The defendant argued that the waiver complied with the terms of the contract because it was in writing. The defendant also In Lewis v. Epic Systems Corporation, the United States Court argued that the non-compete payment was not a contractual right of Appeals for the Seventh Circuit held that an agreement between until employment ended and the defendant enforced the non-compete an employer and its employees requiring arbitration of wage and provision. The plaintiff argued that the non-compete provision was hour claims on an individual basis violates employees’ rights “to for the benefit of both parties. engage in other concerted activities for the purpose of collective The first district agreed with the plaintiff’s position, finding that bargaining or other mutual aid or protection” under Section 7 of the defendant did not properly waive the non-compete provision, the National Labor Relations Act (NLRA). Lewis v. Epic Systems because the provision was not for the sole benefit of the defendant. Corp., 823 F.3d 1147, 1151 (7th Cir. 2016) Accordingly, the plaintiff would have needed to sign a waiver in order The employer, Epic Systems Corporation (Epic), required some for there to be a waiver of the non-compete monies. The appellate of its employees to agree, as a condition of continued employment, court also determined that there was no language in the contract to an arbitration agreement “mandating that wage-and-hour claims showing that the defendant’s decision to enforce the non-compete could be brought only through individual arbitration and that the provision was a condition precedent for the payment. Rather, the employees waived ‘the right to participate in or receive money or only conditions required for the excusal of the payment were a any other relief from any class, collective, or representative proceed- determination that the plaintiff violated the contract or a finding by ing.’” Lewis, 823 F.3d at 1151. the court that the non-compete provision was unenforceable. The plaintiff, a “technical writer” at Epic, approved the agree- The defendant also argued that it had discretion to modify the ment, but then sued Epic on behalf of himself and other technical agreement. The plaintiff responded that the option to modify only writers, contending that Epic had violated the Fair Labor Standards applied to the defendant’s ability to modify the plaintiff’s restrictions Act (FLSA) by misclassifying him and his fellow technical writers if he found other employment that could violate the provision, and and unlawfully depriving them of overtime pay. that any modification of the payment provision needed to be signed Epic moved to dismiss the claims and compel individual arbitra- by the plaintiff. The first district agreed with the plaintiff, finding tion. The plaintiff, however, argued that the agreement’s class and that “the parties’ intent was to provide plaintiff with a mechanism collective action waiver violated the NLRA because it interfered to request that his non-compete restrictions be modified in the event with employees’ right to engage in concerted activities for mutual that plaintiff was offered other employment he believed would violate aid and protection and, therefore, was unenforceable. The district his non-compete restrictions.” court ruled in plaintiff’s favor, and Epic appealed. Finally, the appellate court determined that the plaintiff had In affirming the district court’s ruling, the Seventh Circuit Court no duty to mitigate his damages by finding employment. While the of Appeals noted that contracts that purport to restrict employees’ defendant argued that a non-breaching party has a duty to mitigate rights under the NLRA are unenforceable and that “[c]ollective or his damages, the plaintiff argued that the general rule did not apply, — Continued on next page

IDC 2016 SURVEY OF LAW | 25 Survey of 2016 Employment Law Cases (Continued) class legal proceedings fit well within the ordinary understanding of employee” would nullify the Act’s legislative intent—to protect ‘concerted activities.’” Id. at 1153. Significantly, the court rejected individuals with bad credit histories from being denied gainful Epic’s argument that the arbitration agreement must be enforced employment—and allow for the exemption to “swallow the rule.” under the Federal Arbitration Act (FAA). In finding that there is no Based on the court’s statutory interpretation, and the fact that the conflict between the NLRA and the FAA, the court turned to the plaintiff did not file a cross motion for summary judgment, the case FAA’s “savings clause” in 9 U.S.C. § 2, which states that arbitra- was remanded to the trial court for further proceedings consistent tion agreements “shall be valid, irrevocable, and enforceable, save with the court’s opinion. upon such grounds as exist at law or in equity for the revocation of any contract.” The court reasoned that because the class and col- Ohle v. Neiman Marcus Group, 2016 IL App (1st) 141994. lective action waivers are unlawful under the NLRA, and because an unlawful agreement is not enforceable under the FAA’s savings clause, “there is no irreconcilable conflict between the NLRA and Termination of Employee Upheld the FAA.” Id. at 1158. After Allegations of Age and The court also rejected Epic’s argument that the FAA requires Disability Discrimination enforcement of the agreement because the right to a class or collec- tive action is procedural as opposed to substantive. The court held In Kreczko v. Triangle Package Machinery Co., Triangle that because the right to engage in “concerted activity” through Package Machinery Company (Triangle) terminated 51-year-old class or collective actions is a substantive right protected by the employee, Andrew Kreczko, after receiving multiple customer NLRA, any agreement requiring employees to waive this right is complaints about his unprofessional behavior and job performance. not enforceable under the FAA. Kreczko met with management and was required to re-train, how- ever, he continued to demonstrate unsatisfactory performance and Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016). his employment was eventually terminated. Four months after Krec- zko’s termination, Triangle hired a younger, Hispanic employee to

First District Narrowly Defines “Access” Provision to Employee Credit Privacy Act In analyzing the age discrimination In Ohle v. Neiman Marcus Group, the Illinois Appellate Court, claim, the first district noted that First District, ruled that the trial court erred in finding that an entry Kreczko did not dispute that he failed level sales position involved access to personal or confidential cus- tomer information, and, therefore, was exempt from the protections to perform his job satisfactorily. afforded prospective employees under the Employee Credit Privacy Triangle memorialized each Act. 820 ILCS 70/10(b)(5). Defendant-employer admitted that it performance issue in writing and met discriminated against plaintiff in denying her employment after her background check revealed that she had a poor credit history. with Kreczko on two occasions On appeal the issue was whether an entry level employee’s limited to advise him to improve. contact with a customer’s application for a store credit card—which contained personal information (date of birth, social security num- ber, etc.)—qualified as “access” to confidential information under the Act. In reversing the trial court’s grant of summary judgment, fill his position. Kreczko sued Triangle alleging age, disability and the appellate court held that “[i]n the context of this case, ‘access’ racial discrimination. Kreczko alleged that he was in a protected to credit application information would pertain to the employees class and met Triangle’s legitimate expectations. As to the disability that process the credit application, receive the customer’s credit claim, Kreczko alleged that he had a preexisting heart condition and report, analyze the customer’s detailed financial history and make Triangle knew that he had difficulty working in certain conditions. the decision on whether to extend credit.” Ohle v. Neiman Marcus The circuit court granted Triangle’s summary judgment motion on Group, 2016 IL App (1st) 141994, ¶ 40. The court further held that the age and disability claims, and Kreczko appealed. to allow for a broad interpretation of the “access” provision, as to In analyzing the age discrimination claim, the first district include “merely accepting credit card applications by an entry level noted that Kreczko did not dispute that he failed to perform his

26 | IDC 2016 SURVEY OF LAW job satisfactorily. Triangle memorialized each performance issue because Belk’s physical advances were not sufficiently sexual in in writing and met with Kreczko on two occasions to advise him nature and that his conduct was, at worst, unprofessional, disre- to improve. Kreczko did not identify a younger employee who was spectful, and threatening. The court disagreed and held that even similarly situated. Therefore, he failed to establish a prima facie though Belk subjected Walker to a range of demeaning behaviors, case of age discrimination. he also engaged in conduct of an undeniably sexual nature. These As to the disability discrimination claim, Kreczko contended acts included attempting to kiss her, massaging her shoulders, run- that he was involved in an accident, which caused a heart attack, ning his hands through her hair, touching her face, and pressuring was hospitalized and had taken medication ever since. Triangle her for dates. The circumstances sufficiently constituted sexual responded that Kreczko never provided any verifiable medical misconduct giving rise to a work environment that a reasonable documentation which substantiated a heart condition. Kreczko also person would consider hostile and abusive. The court, therefore, never declared he had a disability or requested accommodations. affirmed the circuit court’s ruling, which confirmed the Commis- The court determined that Triangle’s reason for firing Kreczko was sion’s decision. legitimately based on his poor work performance. Cook County Sheriff’s Office v. Cook County Comm’n on Human Kreczko v. Triangle Package Machinery Co., 2016 IL App (1st) Rights, 2016 IL App (1st) 150718. 151762.

Laid-Off Carpenter Files Late Discrimination Sexual Harassment Analyzed by Charges and Fails to Establish Improper First District Motive for Retaliatory Discharge Claim

In Cook County Sheriff’s Office v. Cook County Commission on In Vulpitta v. Walsh Construction Co., the Illinois Appellate Human Rights, plaintiff Cynthia Walker (Walker) filed a claim with Court, First District, affirmed summary judgment in favor of Walsh the Cook County Commission on Human Rights (Commission), Construction Company (Walsh) finding the plaintiff’s discrimination alleging that she was subjected to sexual discrimination and harass- charges were untimely and plaintiff failed to establish his termina- ment while working at the Department of Corrections. Walker alleged tion was in retaliation for seeking workers’ compensation benefits. her coworker and eventual supervisor, Antonio Belk (Belk), subjected The plaintiff was a carpenter for Walsh who suffered a work-related her to ongoing sexual discrimination by displaying unwanted physi- injury in March of 2008 for which he filed a workers’ compensation cal contact and making sexual comments. The Commission found in claim. The plaintiff had a second work-related injury in August of favor of Walker and the circuit court confirmed. The Cook County 2011, but was released to return to work with no restrictions the Sheriff’s Office (Sheriff’s Office) appealed arguing, inter alia, that following day and no workers’ compensation claim was filed at the Commission’s determination that Walker was subjected to sexual that time. In December of 2011, the plaintiff rejected an offer to harassment was against the manifest weight of the evidence. settle his workers’ compensation claim for his March 2008 accident. The Sheriff’s Office maintained that Walker failed to demon- A Walsh supervisor testified the plaintiff was laid off on May 24, strate that she subjectively perceived her work environment to be 2012 due to lack of work. The plaintiff was the last carpenter to hostile or abusive, and noted that the Commission found that Belk’s be laid off from the project. The plaintiff conceded he received no conduct did not rise to the level of sexual harassment during the first further compensation or benefits from Walsh after May 24, 2012. year. However, Walker made it clear by her testimony and journal The plaintiff saw a physician in July of 2012 and contacted a Walsh entries that Belk’s physical advances and comments escalated in secretary asking for records related to the August 2011 injury for frequency and intensity after he became her direct supervisor. In his “workmen comp claim.” The secretary provided the informa- addition, Walker’s efforts to stop Belk’s behavior often resulted tion requested without informing plaintiff’s supervisor. The plaintiff in Belk making profane comments and physical threats. Walker’s filed a workers’ compensation claim for the August 2011 injury on mental state declined, and she was treated by a psychologist. The July 6, 2012. Four days later, on July 11, 2012, the plaintiff met his court, therefore, concluded that Walker’s experience of a hostile supervisor—a personal friend of many years—for lunch. According work environment, which was a result of Belk’s sexual advances, to the plaintiff, his supervisor told him, “I have to let you go,” and was not against the manifest weight of evidence. “I don’t want to do this.” The Sheriff’s Office also argued that the evidence did not sup- port a finding of sexual harassment under the objective standard — Continued on next page

IDC 2016 SURVEY OF LAW | 27 Survey of 2016 Employment Law Cases (Continued)

The plaintiff filed a charge of discrimination on December discretionary bonuses and incentive pay to satisfy up to 10 percent 28, 2012 with the Illinois Department of Human Rights (Depart- of the standard salary test, so long as it is paid at least quarterly. ment) asserting Walsh terminated his employment on the bases of The rule would also increase the salary test for highly compensated retaliation and disability. The charge was dismissed by the Depart- employees (HCE) from $122,148 annually to $134,004 annually. ment finding it was filed 218 days after the discharge date of May (There is an open question as to whether the HCE exemption was 24, 2012 and, therefore, outside the 180-day limitations period also put on hold by the court order, as the order did not specifically for filing such charges. The plaintiff subsequently challenged the mention that part of the regulation change.) Lastly, the rule would Department’s decision with a civil action in the circuit court. The provide for an adjustment to the salary level test every three (3) trial court granted summary judgment on the discrimination claim years, beginning on January 1, 2020. The automatic adjustment is finding the claims untimely. The appellate court agreed rejecting set based upon the 40th percentile of full time salaried workers in plaintiff’s arguments that a genuine issue of material fact existed the lowest-wage Census region. 29 CFR Part 541. For now, however, as to whether the plaintiff was terminated on May 24, 2012 or later the changes are on hold unless or until the court makes further rul- at the July 11, 2012 lunch meeting. ings on the issue. It is possible that the Trump administration will The appellate court also affirmed summary judgment as to the instruct the DOL to withdraw an appeal of the Texas court’s ruling. plaintiff’s retaliatory discharge claim. The appellate court held the plaintiff failed to establish a causal connection between the plain- Chicago and Cook County to Mandate Paid Sick Leave tiff’s exercise of rights under the Illinois Workers’ Compensation Act and his discharge. The plaintiff’s unsupported conclusions and On June 22, 2016, the Chicago City Council passed a new or- speculation were insufficient to establish a retaliatory motive as to dinance, which will take effect on July 1, 2017, requiring employers the cause of his termination. to provide paid sick leave to employees. On October 5, 2016, the Cook County Board of Commissioners passed a very similar paid Vulpitta v. Walsh Construction Co., 2016 IL App (1st) 152203. sick leave ordinance, also going into effect July 1, 2017. In doing so, they join nearly 30 other local jurisdictions (and counting), and several states, with similar paid sick leave laws. On a State level, Changes to Fair Labor Standards Illinois does not require paid sick leave, but as of January 1, 2017, Act (FLSA) White Collar Overtime requires employers who do provide paid sick leave to allow employ- Exemption on Hold ees to use the time for the medical care of their family members under the Illinois Employee Sick Leave Act. On November 22, 2016, the U.S. District Court for the Eastern Overview: Chicago’s Ordinance applies to employers who District of Texas issued a nationwide injunction on the Department maintain a business facility in Chicago and/or who are required of Labor’s (DOL) implementation and enforcement of the new to obtain a business license to operate in the City. Cook County’s regulations under the Fair Labor Standards Act (FLSA) that were Ordinance applies to an employer that “gainfully” employs “at least set to take effect on December 1, 2016. Nevada v. U.S. Dep’t of one Covered Employee with its principal place of business within Labor, No. 4:16-cv-00731, 2016 WL 6879615 (E.D. Tex. Nov. 22, Cook County.” A “covered employee” is one who performs at least 2016). If the regulations are allowed to go into effect, an employee two hours of work in a two-week period for an employer while generally must meet the following criteria in order to qualify for physically present within Cook County. (Cook County’s ordinance the white collar exemption: does not apply to City of Chicago employees.) Both ordinances have the same eligibility requirements of 1. be salaried, meaning paid on a predetermined and fixed working at least 80 hours for an employer in any 120-day period of amount not subject to reduction because of variations time. Thus, most part-time employees and many seasonal workers in quality or quantity of work (salary basis test); will qualify. Both ordinances provide that employees earn one hour 2. be paid more than $913 per week (salary level test); and of sick leave for every 40 hours worked, with a cap of 40 hours in 3. primarily perform executive, administrative or profes- a 12-month period (counted from the date accrual begins), unless sional duties (duties test). the employer sets a higher limit. Employees will begin to accrue the leave time on their first day The most significant change in the regulations is the salary level of employment (or on July 1, 2017 if already employed) but can test, which would be more than doubled from the previous $455 be required to wait up to 180 days after their start date to actually per week to $913 per week. The regulations would also allow non- begin taking the leave. Employers can set minimum increments of

28 | IDC 2016 SURVEY OF LAW sick leave use, but not more than four hours per day. Employees who Ordinance. Chicago employees have a private right of action in court. are “exempt” under the Fair Labor Standards Act will be presumed Under both ordinances, if the employee prevails, the penalties for to work 40 hours per week. failing to provide paid sick leave include triple the amount of any Use of Sick Leave: The sick leave under both ordinances can non-payment or underpayment (with interest), as well as attorneys’ be used for an employee’s or employee’s family member’s illness fees and costs to the prevailing employee of pursuing his or her claim. or injury, preventative medical care, issues of domestic violence or The Cook County Ordinance has a three-year statute of limitations a sex offense (the employee or employee’s family member), and from the date of the last event constituting the alleged violation, for certain public health emergencies. “Family members” include while Chicago’s ordinance is silent on the statute of limitations. any blood relative, domestic partner, those with a foster, adoptive or step relationship, and any person whose close association with the employee is the equivalent of a family relationship. About the Authors Employers can require notice be given when feasible, and can Denise Baker-Seal is a partner in the Belleville, Illinois require medical documentation of the need for leave of three or law firm of Brown & James, P.C. Her practice has focused more consecutive days. on the defense of employment matters and catastrophic personal injury cases. She serves as Co-Chair of the Carry-Over, FMLA, and Treatment at Termination: Unless Firm’s Employment Law Group. Ms. Baker-Seal has ex- otherwise provided by a collective bargaining agreement or other perience representing clients in state and federal courts, written policy, the Ordinance does not require employers to pay the EEOC, and state and local administrative agencies. She also serves as an arbitrator in the mandatory arbitration programs out unpaid sick leave upon termination of employment (voluntary in St. Clair and Madison Counties. Prior to entering private practice, Ms. or involuntary). On the other hand, employees will be allowed to Baker-Seal served as judicial law clerk to the Honorable Lewis M. Blanton, carry over half of any unused sick time into the next year, up to 20 U.S. Magistrate Judge. A graduate of Millikin University and Northeastern University School of Law, Ms. Baker-Seal is admitted to the bars of Illinois hours (or up to 40 hours if for leave under the Family and Medical and Missouri and all federal courts in Illinois. Leave Act (FMLA)). Theresa Bresnahan-Coleman is an associate at Lang- henry, Gillen, Lundquist & Johnson, LLC in Chicago. Exceptions and Variances: Ms. Bresnahan-Coleman concentrates her practice in • Neither Ordinance will apply to construction industry civil litigation defense, with an emphasis in employment workers who are covered by a bona fide collective law, municipal civil rights, personal injury, and premises liability. She serves as Chair of the IDC Employment Law bargaining agreement (CBA). Committee. She is a member of the IDC Local Govern- • The Cook County Ordinance does not include railroad ment Law Committee and of the Chicago and Illinois State Bar Associations. employees. She received her law degree in 2009 from New England School of Law, where she served as the managing editor of the New England Journal of • Neither Ordinance requires unions and employers to International and Comparative Law and earned a CALI award in Employee immediately re-negotiate CBAs and instead, they can Benefits. Ms. Bresnahan-Coleman received her master of arts degree in English in 2006 from Loyola University Chicago and her bachelor of arts wait until the next contract period. The parties to a CBA degree in English and Computer Applications in 2001 from the University can also decide to explicitly waive the minimum sick of Notre Dame. Prior to attending law school, Ms. Bresnahan-Coleman leave requirements. worked as an investigator for the Federal Trade Commission.

• Under both Ordinances, employees in occupations in Julie A. Bruch is a partner with O’Halloran Kosoff Geitner which tips have customarily constituted part of their & Cook, LLC. Her practice concentrates on the defense pay must be compensated for sick time at a rate at least of governmental entities in civil rights and employment discrimination claims. equal to the applicable minimum wage.

Employers who already provide paid time off in at least an amount and manner that meets the requirements of the Ordinances Molly P. Connors is an associate at Brady, Connolly & do not have to provide additional paid leave. Masuda, P.C. She focuses her practice on the defense of construction, premises liability, employer liability, and insurance coverage claims. Ms. Connors earned her J.D. Violations: The only significant difference between the Cook at the University of Michigan Law School and her under- County and Chicago ordinances is enforcement. Under Cook graduate degree at The George Washington University. County’s ordinance, the Cook County Commission on Human Rights will administer and enforce the law. Employees will need to file an administrative complaint with the Commission for violations of the — Continued on next page

IDC 2016 SURVEY OF LAW | 29 Survey of 2016 Employment Law Cases (Continued)

James L. Craney is the founding partner of Craney Law W. Scott Trench is a senior associate in the civil litigation Group LLC. His areas of practice include insurance cover- department of Brady, Connolly & Masuda, P.C.’s Chicago age litigation and general litigation with an emphasis upon office. His practice includes insurance coverage litigation trial.. Mr Craney also has extensive experience with em- and the defense of insured and self-insured clients in state ployment law, municipal law, environmental litigation, first and federal courts in construction, premises liability, em- party insurance litigation and complex business litigation. ployment, and commercial litigation matters. He received In addition, he regularly appears before the EEOC and Il- his undergraduate degree from Arizona State University linois Department of Human Rights representing employers in 1995 and his law degree from the DePaul University throughout the administrative review process. Mr. Craney obtained the Health College of Law in 1999. Law Certificate from St. Louis University law school, and previously clerked with the U.S. Department of Health and Human Services, Office of Inspec- Jennifer A. Winking is a partner with the Quincy law tor General. Prior to his legal career, he worked as a statistical data analyst firm of Scholz Loos Palmer Siebers & Duesterhaus LLP, with Washington University medical school, and has published extensively where she concentrates her practice on employment law in medical and psychiatric journals. and litigation and workers compensation defense. She has presented for the Illinois State Bar Association on topics Jessica S. Holliday is a Senior Associate at Brown & of employment law and workers compensation and is a James, P.C., practicing in the firm’s Belleville, Illinois office. frequent lecturer on various employment topics, including Ms. Holliday focuses on employment cases, as well as harassment and sensitivity training. She earned her B.A. personal injury cases involving premises liability, product from Quincy University as a double major graduating summa cum laude and liability, and transportation law. She represents employers her J.D. from the University of Missouri-Columbia School of Law, where she and other businesses in defense matters. was Managing Editor of the Missouri Law Review and was inducted into the Order of the Coif.

Matthew G. Jones is an attorney at the Del Galdo Law Group, LLC, where he focuses his practice on labor and employment law committee employment law. Mr. Jones earned his B.A. degree from the University of Wisconsin-Madison and went on to earn his Denise Baker-Seal, Chair J.D. from Loyola University Chicago School of Law. While attending law school, he was a member of the National ABA Brown & James, P.C., Belleville Moot Court Team and served as a staff editor for Loyola’s Annals of Health Law Journal. Additionally, he was a recipi- 618-235-5590 ent of the Honors Scholarship for all three years of attendance and received [email protected] the CALI Award for Excellence in Advocacy.

Gabriel R. Judd is an associate with HeplerBroom LLC in Chicago where he concentrates his practice in insurance law with an emphasis in first-party coverage disputes, in- James L. Craney, Vice Chair cluding insurance fraud and bad faith litigation claims. Mr. Judd also represents municipalities in negligence, willful Craney Law Group LLC, Edwardsville and wanton, and civil rights actions, handling various premises liability and police misconduct matters. He 618-972-8307 has civil litigation experience in Illinois state and federal [email protected] courts.. Mr Judd also has litigation experience handling employment law matters in both Illinois state and federal courts and before the Illinois Human Rights Commission. MEMBERS is an associate with Heyl, Royster, Emily J. Perkins Theresa Bresnahan-Coleman Langhenry, Gillen, Lundquist Voelker & Allen, P.C. in Peoria. She concentrates her prac- tice in the area of employment/labor law and tort litigation, & Johnson, LLC including medical malpractice and professional liability. She Julie Bruch O’Halloran Kosoff Geitner & Cook, LLC received her J.D. from Northern Illinois University College Molly P. Connors Brady, Connolly & Masuda, PC of Law in 2014, M.B.A. from Bradley University in 2011, Terry A. Fox Flaherty & Youngerman, P.C. and B.S. from Illinois State University in 2008. Jessica L. Galanos HeplerBroom LLC Kimberly A. Ross is a partner in the Chicago office of Jessica Holliday Brown & James, P.C. Ford & Harrison LLP. She concentrates her legal practice Lance Jones HeplerBroom LLC on defending and counseling management in employment Matthew G. Jones Del Galdo Law Group, LLC law matters. Ms. Ross’ experience includes harassment Johnson & Bell, Ltd. and discrimination claims under Title VII and the Illinois Gabriel R. Judd Human Rights Act, the ADEA, ADA, FMLA, and FLSA, as Andrew R. Makauskas Brady, Connolly & Masuda, PC well as non-compete agreements, whistleblower claims, R. Mark Mifflin Giffin, Winning, Cohen & Bodewes, P.C. negligent hiring, supervision and retention, and retaliatory Emily J. Perkins Heyl, Royster, Voelker & Allen, P.C. discharge. Ms. Ross conducts seminars, provides training and on proper Ford & Harrison LLP employment practices including hiring, effective discipline and discharge, Kimberly A. Ross performing investigations, maintaining personnel files and properly classify- Bradley J. Smith Keefe, Cambell, Biery & Associates, LLC ing employees under the FLSA, reviews and drafts employee handbooks, W. Scott Trench Brady, Connolly & Masuda, PC employment policies, employment contracts, and severance agreements. Jennifer A. Winking Scholz, Loos, Palmer, Siebers She received her undergraduate degree from the University of Michigan in & Duesterhaus LLP 1992 and her J.D. from DePaul University College of Law in 1996. She is a past Editor of the IDC Quarterly. Maura Yusof Heyl, Royster, Voelker & Allen, P.C.

30 | IDC 2016 SURVEY OF LAW Survey of Insurance Law Cases

OCCURRENCE Construction Defect Claim Not Covered by CGL Policy Homeowners – No Occurrence – No Duty to Defend In Westfield Insurance Co. v. West Van Buren, LLC, a com- mercial general liability carrier filed a declaratory judgment action Winnetka neighbors became involved in litigation as the seeking a determination that it had no duty to defend a developer result of one neighbor, McGoey, seeking to relocate a driveway against an action brought by a condominium association. The asso- on an easement on her property granted in favor of certain other ciation alleged that the condominium developer failed to install a roof neighbors. The easement was granted in 1940. In 2006, McGoey system properly and failed to correct those defects. The complaint began efforts to relocate a driveway on the easement because it alleged that the developer breached various contractual warranties was contributing to recurrent flooding of her home. The neighbors and committed fraud. The appellate court held that the underlying would not consent to the relocation, so McGoey filed a complaint lawsuit did not meet the CGL policy’s “occurrence” requirement for a writ of mandamus allowing her to relocate the driveway. No because the complaint focused on the intentional bad acts of the money damages were claimed. She later sought injunctive relief developer or non-fortuitous events, like the resulting damage to the and asked the court to enjoin her neighbors from allowing water to condo building due to defective workmanship. The appellate court drain onto McGoey’s property and to declare her rights under the further held that the association’s claims for damages for the costs written easement agreement. to repair the defective roof merely sought recovery for economic The trial court conducted settlement conferences and an agree- harm, not “property damage” as required by the policy. Although ment was reached; McGoey’s neighbors, however, filed motions in the complaint also alleged that the defective roof had caused actual an effort to change the settlement agreement, causing McGoey to file physical harm to personal property, which could constitute “property motions to enforce the settlement and for sanctions. The trial court damage” under the policy, the appellate court held that the carrier ultimately granted McGoey’s motion to enforce the settlement, but did not have a duty to defend because the association’s complaint denied her motion for sanctions. did not seek recovery for that damaged personal property. The neighbors sought a defense and indemnity under their homeowners’ policy issued by Travelers. Travelers denied cover- Westfield Ins. Co. v. West Van Buren, LLC, 2016 IL App (1st) 140862. age on the grounds that McGoey was not seeking damages as the result of “bodily injury,” “personal injury,” or “property damage.” The trial court granted summary judgment in favor of Travelers Complaint against Municipality because there was no claim for money damages and, alternately, the Alleged a “Loss” Sufficient to allegations in the suit by McGoey could not be interpreted as an Trigger Liability Coverage “accident” so there was no “occurrence.” The appellate court affirmed and agreed with the trial court In Illinois Municipal League Risk Management Ass’n v. City that the alleged flooding of McGoey’s home “did not result from of Genoa, the Illinois Appellate Court, Fourth District reversed the an occurrence or accident covered by the policy because the flood trial court’s decision that a complaint failed to allege a “loss” within damage was a natural and ordinary consequence of defendants’ the meaning of an insurance policy. The Regional Transportation repeated refusal to allow McGoey to relocate the driveway ease- Authority (RTA) sued the City of Genoa (Genoa) for allegedly ment.” Travelers Personal Insurance Co. v. Edwards, 2016 IL App entering into a tax kickback scheme. According to the allegations (1st) 141595, ¶ 25. Since there was no “occurrence” Travelers had of complaint, Genoa entered into an agreement with a company no duty to defend the homeowners, and summary judgment for whereby Genoa would give the company part of the sales tax it col- Travelers was affirmed. lected from the company if the company moved a sales office within city limits. The suit maintained that the sales office located within Travelers Personal Ins. Co. v. Edwards, 2016 IL App (1st) 141595. — Continued on next page

IDC 2016 SURVEY OF LAW | 31 Survey of 2016 Insurance Law Cases (Continued) city limits was then used to create sham point-of-sale transactions, the firm in state court and the firm turned the claim into its insurer, and, as a result of sham transactions, the RTA lost tax revenue from Hartford. Hartford filed a declaratory judgment action in federal transactions which should have been credited as occurring within district court and eventually moved for summary judgment. The dis- its taxing district. trict court granted the summary judgment and the insured appealed. After Genoa submitted the lawsuit for a defense under a liability On appeal, Hartford argued that it was not liable because the policy that it had with the Illinois Municipal League Risk Manage- policy required an injury that arose out of a negligent act and not ment Association (Municipal League), Municipal League denied out of a breach of contract. The court noted that “moral hazard” coverage on the basis that the complaint failed to allege a “loss” precludes coverage for breach of contract because it could allow to Genoa, which was a prerequisite for liability coverage under the insureds to intentionally act to obtain the policy proceeds. The court policy. According to Municipal League, a “loss” under the policy analogized the matter to intentionally setting one’s house on fire or is “the loss of something which you had a right to possess to begin contracting to buy a car, refusing to do so, and then collecting the with,” and the RTA’s suit against Genoa sought a disgorgement of insurance benefits for not buying the car. Further, the court rejected ill-gotten gains and restitution. Thus, under Municipal League’s the insured’s argument that there was a negligence component to reasoning, if the RTA prevailed and Genoa was required to disgorge the underlying breach of contract claims. ill-gotten gains, Genoa would be paying money that it never had Finally, the court did admonish Hartford for taking seven the right to possess in the first place and would not suffer a “loss.” months to deny the claim, but found that no estoppel claim was In the ensuing coverage litigation, the trial court agreed with valid because Hartford did not owe a duty to defend. Municipal League. On appeal, the fourth district reversed the trial court’s judgment Hartford Cas. Ins. Co. v. Karlin, Fleisher & Flalkenberg, LLC, 822 in Municipal Leagues’ favor. It found that both Municipal League F.3d 358 (7th Cir. 2016). and the trial court misconstrued the RTA’s lawsuit. The RTA’s law- suit against Genoa did not seek a disgorgement of ill gotten gains or restitution and did not contend that Genoa should pay it the sales Insurer Compelled to Defend Joint Venture tax that Genoa collected. Rather, the RTA’s suit sought the recovery of taxes that should have been collected for transactions within its In American Alternative Insurance Corp. v. Metro Paramedic taxing district, but were not collected because of Genoa’s scheme Services, Inc., the insurer denied a duty to defend and indemnify and the sham point-of-sale transactions. As a consequence, because an entity that was not named in the policy. Three female employees Genoa would need to use money that it was otherwise entitled to filed suit against two ambulance services for sexual harassment, possess to pay damages if the RTA was successful, the claims against assault and battery, retaliation, and negligent supervision. The two Genoa alleged a “loss” within the meaning of the policy. paramedic services, Antioch and Metro, were alleged to operate in tandem with one other by using the same staff and the same Illinois Mun. League Risk Mgmt. Ass’n v. City of Genoa, 2016 IL uniforms. Antioch was insured by AAIC and the policy provided App (4th) 150550. that a partnership or joint venture was considered an insured. Metro moved for summary judgment arguing that it should be defended and indemnified under Antioch’s AAIC policy. The trial court granted DUTY TO DEFEND Metro’s motion for summary judgment. On appeal, AAIC argued that: (1) Metro was not listed as a Insurer Has no Duty to Defend or named insured; (2) Antioch and Metro were not organized as a Indemnify for Unpaid Wages partnership or joint venture; and (3) the contracts between Antioch and Metro specifically denounced any partnership or joint venture In Hartford Casualty Insurance Co. v. Karlin, Fleisher & relationship between the two entities. The first two arguments were Falkenberg, LLC, the Court of Appeals for the Seventh Circuit af- deemed waived as they were not raised at the trial court level. In firmed the trial court’s granting of summary judgment in favor of the considering the third point, the court looked to the substance of the insurer finding that it had no duty to defend or indemnify the insured relationship rather than the language of the contract between the in a claim for unpaid wages. The plaintiff, in the underlying suit, was two entities to determine whether a joint venture did, in fact, exist. a retiring lawyer. Upon his retirement he requested payment for 90 The court then applied the “eight corners” rule and examined weeks of unused vacation and 322 days for unused sick leave for a the “four corners” of the complaint and the “four corners” of the total of about $950,000. The underlying plaintiff filed suit against policy. The complaint alleged that the two paramedic services were

32 | IDC 2016 SURVEY OF LAW operating as a joint venture by sharing staff, uniforms, and resources. other pharmaceutical distributors alleging that its citizens suffered Therefore, a duty to defend Metro was triggered because of the al- from “unwarranted injuries, addictions, diseases, and sicknesses” and legations of a joint venture in the complaint. The court dismissed that they required hospital services and other necessary medical care AAIC’s argument that a plaintiff need only allege a joint venture to which was being paid for by the taxpayers. The insurer argued that trigger a duty to defend and stated that the insurer could amend the West Virginia was seeking recoupment of its own damages which policy language to avoid such a result. The appellate court affirmed were not caused by bodily injury. The court rejected this argument the lower court’s granting of summary judgment in favor of Metro. and analogized West Virginia to a mother caring for an injured child which, at oral argument, counsel for defendant acknowledged would American Alternative Ins. Corp. v. Metro Paramedic Services, Inc., be covered under the policy as the policy covers “damages claimed 829 F.3d 509 (7th Cir. 2016). by any person or organization for care…resulting…from the bodily injury.” The Court of Appeals reversed the district court and held that the insurer did have a duty to defend the insured. Insurer Has Duty to Defend Pharmaceutical Company in Suit by West Virginia Cincinnati Ins. Co. v. H.D. Smith, L.L.C., 829 F.3d 771 (7th Cir. 2016). In Cincinnati Insurance Co. v. H.D. Smith, L.L.C., the insurer sought a declaratory judgment that it had no duty to defend the EXCLUSIONS insured in a suit brought by the state of West Virginia against the insured. The lower court granted Cincinnati’s motion for summary Criminal Acts Exclusion Does Not Eliminate judgment and the Court of Appeals for the Seventh Circuit reversed. Duty to Defend Prior to Conviction

In Country Mutual Insurance Co. v. Dahms, the Illinois Ap- pellate Court, First District, held that an insured was entitled to a West Virginia brought suit against defense under a homeowner’s policy for an underlying claim alleging H.D. Smith and other pharmaceutical battery and negligence. Count I of the underlying complaint alleged that Charles Dahms, the insured, negligently hit the claimant with distributors alleging that its citizens his briefcase. Count II alleged that Dahms’ conduct constituted bat- suffered from “unwarranted injuries, tery. Dahms asserted self-defense as an affirmative defense. Dahms’ addictions, diseases, and sicknesses” homeowner’s insurer denied coverage, arguing that the complaint did not allege an accidental “occurrence” and that exclusions for and that they required hospital criminal acts and expected or intended bodily injury completely services and other necessary medical eliminated coverage. Dahms was subsequently convicted of aggra- care which was being paid for by vated battery. The appellate court held that the insurer breached its duty to defend because the negligence count potentially alleged a the taxpayers. The insurer argued covered accidental “occurrence” and, for that reason, held that the that West Virginia was seeking expected and intended injury exclusion did not apply to eliminate recoupment of its own damages the duty to defend. The court held that the criminal acts exclusion precluded the insurer’s duty to defend, but only after Dahms was which were not caused by convicted. Prior to the conviction, the exclusion was inapplicable. bodily injury. Accordingly, the insurer was liable for defense expenses incurred by Dahms prior to his conviction.

Country Mutual Ins. Co. v. Dahms, 2016 IL App (1st) 141392. At issue was the policy language which provided coverage for damages that H.D. Smith became liable for “because of bodily injury.” The court illustrated the critical difference between coverage “for bodily injury” and coverage “because of bodily injury.” In the instant matter, West Virginia brought suit against H.D. Smith and — Continued on next page

IDC 2016 SURVEY OF LAW | 33 Survey of 2016 Insurance Law Cases (Continued)

Wrongful Death Claim Alleged Injuries The manufacturer’s CGL and umbrella policies excluded cov- “Independent” of Controlled Substances erage for bodily injury for which any insured may be held liable Exclusion by reason of: (1) causing or contributing to the intoxication of any person; (2) the furnishing of alcoholic beverages to a person under The Illinois Appellate Court, First District, in Skolnik v. Allied the legal drinking age or under the influence of alcohol; or (3) any Property & Casualty Insurance Co., considered whether a con- statute, ordinance or regulation relating to the sale, gift, distribution trolled substances exclusion in homeowners’ and umbrella personal or use of alcoholic beverages. liability policies applied to a wrongful death claim brought by the family of a methadone overdose victim. Haley Johnson died of methadone intoxication in the bedroom of defendant Joshua Skol- nik, who lived at his parents’� home.��������������������������������� ����������������������������Skolnik’s prescribed metha- The appellate court held that although done was found in the bedroom where Johnson died. Skolnik’s most of the complaints alleged that parents’ insurance policies excluded bodily injury “arising out of the use” of controlled substances. The exclusion, however, had an the stimulants added to Four Loko exception for “the legitimate use of prescription drugs by a person masked or added an additional following the orders of a licensed physician.” The appellate court element to the consumer’s held that the underlying complaint contained allegations within, or potentially within, the coverage of the policies. Specifically, intoxication, each underlying the complaint alleged that Skolnik failed to request emergency complaint alleged that Four Loko medical assistance for Johnson within a reasonable period of time was an alcoholic beverage after knowing that she was physically incapacitated, unrespon- that caused or contributed to sive, or unconscious, and knowing or discovering she ingested or unknowingly consumed methadone or other illegal substances the consumer’s intoxication. in the Skolnik home. The complaint further alleged that Skolnik refused to allow Johnson’s two friends to check on, talk to, see, or render aid to Johnson. The first district held that these allegations sought recovery for injury “independent” of the use of controlled The liquor liability exclusion applied “only if you are in the substances and that the insurer of Skolnik’s parents had a duty to business of manufacturing, distributing, selling, serving or furnishing defend him against the wrongful death suit. alcoholic beverages.” Phusion Projects, Inc. v. Selective Ins. Co. of South Carolina, 2015 IL App (1st) 150172, ¶ 41. Skolnik v. Allied Prop. & Cas. Ins. Co., 2015 IL App (1st) 142438. The appellate court held that although most of the complaints alleged that the stimulants added to Four Loko masked or added an additional element to the consumer’s intoxication, each underlying Liquor Liability Exclusion Applies to complaint alleged that Four Loko was an alcoholic beverage that Claims Against Manufacturer of caused or contributed to the consumer’s intoxication. None of the Alcoholic Beverages underlying lawsuits, according to the appellate court, alleged injuries that were independent from the intoxication caused or contributed In Phusion Projects, Inc. v. Selective Insurance Co. of South to by the consumption of Four Loko. Moreover, the insured admit- Carolina, the appellate court reviewed whether the liquor liability ted that it was a manufacturer of alcoholic beverages. Accordingly, exclusion excluded coverage for bodily injury claims brought against the appellate court held that the liquor liability exclusion applied the manufacturer of Four Loko. The underlying complaints alleged and that the insurer did not have a duty to defend the manufacturer that Four Loko was a 23.5 ounce beverage that contained 12% against these bodily injury lawsuits. alcohol, along with the stimulants caffeine, guarani and taurine. According to the complaints, one Four Loko beverage contained Phusion Projects, Inc. v. Selective Ins. Co. of South Carolina, 2015 the same amount of alcohol as five to six beers. The underlying IL App (1st) 150172. plaintiffs alleged that their injuries were caused by individuals who became intoxicated after consuming Four Loko.

34 | IDC 2016 SURVEY OF LAW Anticoncurrent-Causation Clause Upheld had subject matter jurisdiction as it was complete diversity. Turning to the merits, the court stated that the truck driver’s claim clearly In Bozek v. Erie Insurance Group, the plaintiffs’ in-ground arose out of the lease agreement and was for lost wages which was pool was pushed from the ground causing damage to the pool and excluded under the policy. Moreover, the court was not persuaded surrounding concrete area. It was determined that the cause was by Altom’s estoppel arguments as no breach existed. Since the hydrostatic pressure and failure of a pressure relief valve. The parties policy exclusion applied, the court affirmed the lower court’s order stipulated that hydrostatic pressure was an excluded loss. The parties dismissing the matter. disputed whether the failure of the pressure relief valve was covered. The trial court found that there was a question of fact as to coverage Altom Transport, Inc. v. Westchester Fire Ins. Co., 823 F.3d 416 for the failure of the valve, but ruled that the anticoncurrent-causation (7th Cir. 2016). clause rendered the question of fact moot. The policy contained the clause: “We do not pay for loss resulting directly or indirectly from any of the following, even if other events or happenings contributed Construction Indemnity Agreement a concurrently, or in sequence, to the loss.” CGL “Insured Contract” but not Covered On appeal, the plaintiffs argued that “in sequence” meant “sub- sequent to” and that therefore there should be coverage. The appellate In Pekin Insurance Co. v. Designed Equipment Acquisition court rejected this argument and held that the two causes concurrently Corp., the Illinois Appellate Court, First District, held that an contributed to the loss and that the anticoncurrent-causation clause underlying claim brought pursuant to an indemnity agreement in precluded coverage. The appellate court left open the questions of: a construction equipment leasing contract was not covered under (1) whether efficient or dominant proximate cause is the default the “insured contract” exception to the contractual liability exclu- causal nexus in Illinois, assuming the policy language is silent; (2) sion in a CGL policy because the indemnification agreement was whether the use of “in sequence,” as opposed to “in any sequence,” void under the Illinois Construction Contract Indemnification for was materially different to transform the anticoncurrent-causation Negligence Act, 740 ILCS 35/1. The named insured, Abel Building clause into a statement of the efficient-proximate-cause rule; and & Restoration, entered into a contract with Designed Equipment, (3) whether anticoncurrent-causation clauses are unenforceable as the additional insured, for the rental of scaffolding equipment. The a matter of public policy. contract required Abel to defend and indemnify Designed for li- ability caused by the leased equipment or Designed’s non-willful Bozek v. Erie Ins. Group, 2015 IL App (2d) 150155. conduct. One of Abel’s employees, who was injured on the job- site, sued Designed for negligence. Designed, in turn, brought an indemnity claim against Abel. The CGL policy at issue contained Insurer Has No Duty to Defend or Indemnify an exclusion for liability assumed under contract. The contractual for Lost Wages under Policy Exclusion liability exclusion contained an “insured contract” exception that restored coverage for claims brought pursuant to contracts in which In Altom Transport, Inc. v. Westchester Fire Insurance Co., the the insured assumed the tort liability of another party. The court Court of Appeals for the Seventh Circuit affirmed the lower court’s found that even though the indemnity agreement in the scaffolding grant of a motion to dismiss in favor of the insurer. In the underlying agreement constituted an “insured contract” because it obligated action a truck driver filed suit against a trucking company, Altom, Abel to assume Designed’s tort liability for third-party bodily injury alleging that the company failed to abide by the lease agreement claims, there was no coverage because the indemnity agreement was and seeking lost wages. Altom tendered the defense and indemnity void and unenforceable under the Illinois Construction Contract to its insurer, Westchester, which denied the claim. Altom then filed Indemnification for Negligence Act. Accordingly, the court upheld a declaratory judgment action against Westchester and named the the CGL insurer’s coverage denial. truck driver as a material party. Westchester removed the matter to federal court. Altom and the truck driver were residents of Illinois Pekin Insurance Co. v. Designed Equipment Acquisition Corp., 2016 for jurisdictional purposes and Westchester was a Pennsylvania IL App (1st) 151689. corporation. On appeal the Seventh Circuit dismissed the truck driver, reasoning that the insured brought suit against the insurer and therefore the truck driver was a dispensable party. Thus, the court — Continued on next page)

IDC 2016 SURVEY OF LAW | 35 Survey of 2016 Insurance Law Cases (Continued)

WAIVER AND ESTOPPEL mechanism…is available to the Members, the coverage afforded by the Association shall be excess of and shall not contribute with Insurer not Estopped Where Policy such other coverage.” Conferred “The Right But Not the Duty” The trial court found that the Association’s coverage was pri- to Defend mary and State Farm’s was excess. Since the settlement amount of $5,822,500, was within the Association’s $8,000,000 limits, State In FHP Tectonics Corp. v. American Home Assurance Co., Farm’s excess coverage was not implicated. the Illinois Appellate Court, First District, held that an insurer The Association appealed and argued that the “self-insurance” referenced in State Farm’s “other insurance” clause should be in- was not barred from relying on coverage defenses not included terpreted to mean privately funded self-insurance and not publicly in its pre-litigation coverage denial letter because the insured did funded self-insurance. The appellate court rejected the argument not establish that it was prejudiced by the insurer’s failure to raise and found that State Farm’s policy language was unambiguous and the coverage defense prior to litigation. The court also held that a that the Association’s contract with the Village qualified as “self- policy provision giving the insurer “the right but not the duty to insurance.” It affirmed the trial court’s ruling in favor of State Farm defend any suit” precluded a finding of estoppel against the insurer and declined the invitation to use public policy to invalidate State because the Illinois estoppel doctrine, which bars an insurer from Farm’s policy language. raising coverage defenses if it fails to defend under a reservation of rights or file a timely declaratory judgment action, applies only Illinois Municipal League Risk Mgmt. Ass’n v. State Farm Fire & where the insurer has a duty to defend. Although the policy at issue Cas. Co., 2016 IL App (1st) 143336. was a primary insurance policy, the policy did not impose a duty to defend on the insurer. As such, the insurer could not be estopped from denying coverage for its failure to defend. Excess Insurer has Duty to Defend and Indemnify Insured FHP Tectonics Corp. v. American Home Assurance Co., 2016 IL in Third Party Contribution Actions App (1st) 130291. In Cincinnati Insurance Co. v. Estate of Chee, the Seventh Cir- PRIMARY V. EXCESS cuit Court of Appeals held that the insurer under an umbrella policy had a duty to defend and indemnify the insured against third party Umbrella – Self Insurance – actions for contribution. In Chee, a husband drove his automobile Order of Exhaustion into tree. His wife was a passenger and died as the result of injuries sustained in the collision. The wife’s estate filed two lawsuits. One suit was against the husband for negligent driving. The other suit In Illinois Municipal League Risk Management Ass’n v. State was against the hospital and physicians for medical malpractice. The Farm Fire & Casualty Co., a self-insurance pool argued that an um- hospital and physician defendants filed contribution claims against brella policy’s limits should be exhausted before the self-insurance the husband. The husband’s primary insurer tendered policy limits. because the pool was publicly funded. The excess carrier filed a declaratory judgment and claimed it was State Farm issued a “Personal Liability Umbrella Policy” to not responsible because there was no notice, the primary insurer was Reol Valle, an employee of the Village of Lynwood. The policy still defending the insured, and because coverage did not apply to provided, in part: “Other Insurance. The coverage provided by this bodily injury to an insured, (in this case the wife). policy is excess over all other insurance and self-insurance.” The Village belonged to the Municipal League Risk Manage- The Seventh Circuit found that there was no prejudice to the ment Association. The Association agreed to pay on the Village’s insurer when it was notified of the accident via a broker 16 months behalf, all sums the Village would become liable to pay as the result after the accident. Additionally, the Seventh Circuit held that the of “bodily injury” caused by an “occurrence” up to $8,000,000. policy obligated the insurer to defend as soon as the claim arose, The contract did not require the Village or its employees to have not when the primary insurer had exhausted its limits. Specifically, any underlying insurance before its coverage would be effective; the court noted “neither the duty to defend nor the duty to indemnify however the contract did have an “other insurance” clause which depends on disbursal of the applicable limit.” Cincinnati Insurance provided, in part: “If any other valid and collectible coverage, Co. v. Estate of Chee, 826 F.3d 433, 435 (7th Cir. 2016). Finally, whether by commercial insurance, self-insurance or other funding the court held that the policy exclusion of coverage for injuries to

36 | IDC 2016 SURVEY OF LAW an insured contained an exception for contribution claims by third UIM – Rental Car – Financial parties, but did not extend to claims between insureds. Responsibility Act

Cincinnati Ins. Co. v. Estate of Chee, 826 F.3d 433 (7th Cir. 2016). In Safeway Insurance Co. v. Hadary, the appellate court was asked to determine whether a rental car company’s obligation un- der the Financial Responsibility Act had to be exhausted before an UNINSURED/UNDERINSURED insured’s UIM coverage. MOTORIST COVERAGE Safeway’s insureds, the Hadarys, were involved in an automo- bile accident with a car driven by Velez and owned by Hertz. Safe- UIM – Demand for Arbitration way’s policy provided the Hadarys with $100,000 in UIM coverage. Velez had an auto policy with American Access Casualty Company In MemberSelect Insurance Co. v. Luz, the insured’s attorney, with limits of $20,000 per person and $40,000 per occurrence. Hertz two months after an accident, sent MemberSelect a written request was in compliance with the financial responsibility statute which for arbitration of the UIM claim. The policy required UIM arbitra- required Hertz to insure the driver of the rental car for a minimum of tions to be commenced within three years of the accident. More $50,000 per person and $100,000 per occurrence. 625 ILCS 5/9-102. than three years passed, after the request was made, before the American Access paid the Hadarys its occurrence limit of $40,000 underlying suit was settled. After the settlement, the insured sought and the Hadarys then demanded arbitration of their UIM claim against to proceed with the UIM arbitration, but MemberSelect refused and Safeway. Safeway denied the UIM claim and filed a declaratory judg- filed a declaratory judgment action seeking a determination that the ment action seeking a declaration that no UIM coverage was owned limitations period had run. because the underlying insurance provided by Hertz had not been The parties filed cross-motions for summary judgment and the exhausted. The Hadarys argued that because Velez had declined any trial court granted summary judgment in favor of MemberSelect. coverage by Hertz and elected to rely on his own coverage as his The trial court did not believe the written request was adequate primary insurance, Hertz did not provide any coverage that had to be because it was equivocal and did not name an arbitrator. The trial exhausted in order to trigger Safeway’s UIM coverage. court did not equate a “request” for arbitration (the language used The trial court granted summary judgment in favor of Safeway, by the insured’s attorney) with a “demand” for arbitration. believing Hertz’ limits of financial responsibility had to be exhausted The appellate court considered how an insured was to “com- before there could by UIM coverage and the Hadarys appealed. mence” an arbitration. MemberSelect argued that to “commence” The question on appeal was: If the insureds’ damages are not an arbitration, the insured was required to “demand” it and name completely covered by the at fault, rental driver’s personal policy an arbitrator. The appellate court agreed with MemberSelect and limits, does the rental car company or the insureds’ UIM policy the trial court that a “demand” for arbitration was required by the pay the shortfall? The appellate court reviewed the purposes of the financial responsibility statute and noted that it was enacted to policy, but it questioned what would be considered a “demand.” protect the public not insurance companies. It concluded that UIM The court believed any difference between the words “request” and coverage should apply before a rental car company’s liability under “demand” was only semantic. It also noted that Section 143a(1) of the financial responsibility statute and reversed the trial court’s the Illinois Insurance Code, 215 ILCS 5/143a(1), uses the word ruling. Safeway would be obligated to comply with the arbitration “requesting” in describing what action by insureds will trigger the provisions of its UIM policy. arbitration process. With respect to the issue of the insured’s failure to name an Safeway Ins. Co. v. Hadary, 2016 IL App (1st) 132554-B. arbitrator in his request for arbitration, the appellate court held that MemberSelect’s policy language did not require the insured to name an arbitrator, but made it optional. If either party failed to name its Uninsured Motorist – arbitrator, either party, after 45 days, could request arbitration by the Out of State Policy – Waiver American Arbitration Association. The failure to name an arbitrator did not invalidate the insured’s request/demand for arbitration. The In State Farm Mutual Automobile Insurance Co. v. Burke, a trial court’s judgment for MemberSelect was vacated and the case re- Michigan company employed an Illinois resident, Burke, and pro- manded with instructions to enter summary judgment for defendant. vided him with a company owned vehicle. The vehicle was kept by Burke in Illinois and there were no restrictions on its use.

MemberSelect Ins. Co. v. Luz, 2016 IL App (1st) 141947. — Continued on next page

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Burke was driving with his wife and son as passengers when he its actions were not a grant of coverage, but settlement negotiations. was involved in an accident with an uninsured driver. The company The appellate court agreed with State Farm that Granite City had vehicle was insured by Granite City through a policy issued to the extended coverage and waived its policy defenses. “Granite City did Michigan company. The policy contained a Michigan uninsured not inform Burke that, although it was not liable under the policy, it motorist endorsement. Burke had a personal policy on his wife’s was willing to nevertheless settle the Burkes’ claims in order to avoid vehicle with an Illinois uninsured motorist endorsement. further dispute. It is the grant of coverage that serves to transform Granite City’s uninsured motorist policy provided coverage Granite City’s conduct unambiguously into a waiver of its liability only to employees in the course and scope of employment who filed defenses.” State Farm Mut. Ins. Co. v. Burke, 2016 IL App (2d) and received Workers’ Compensation benefits. All claims had to be 150426, ¶ 81. Summary judgment for Granite City was reversed. filed within 365 days of the accident. After investigating the claims, Granite City claims representa- State Farm Mutual Auto. Ins. Co. v. Burke, 2016 IL App (2d) 150462. tives had concerns as to whether there was coverage since it did not appear that Burke, his wife and son were within the course and scope of employment at the time of the accident. Nevertheless, Section 143.1 of the Insurance Code Granite City informed Burke that it would be “granting coverage” Tolled the Policy’s Limitations Period to the Burkes for their uninsured motorist claims and offered Burke When Insured Completed a Notarized $20,000 and his wife and son, $300, each. Burke rejected the offers Notice of Claim. and demanded arbitration. Granite City denied coverage and Burke demanded arbitration under his personal State Farm policy. In Country Preferred Insurance Co. v. Whitehead, the Illinois State Farm responded with a declaratory judgment action. It Appellate Court, Third District, applied the tolling provision of believed that Granite City’s UM coverage was primary. Granite City Section 143.1 of the Insurance Code to a limitations period for an defended, claiming its policy did not apply because the policy was uninsured motor vehicle claim. The insured’s auto policy had a delivered to the Michigan employer, in Michigan, so Section 143a limitations period which required any arbitration under the policy to of the Insurance Code, 215 ILCS 5/143a, did not apply, the Burkes be commenced within two years of the accident. On July 21, 2007, were not employees at the time of the accident, the claim was not the insured was involved in an automobile accident caused by an filed within 365 days, and Granite City did not waive policy defenses uninsured motor vehicle. On October 17, 2007, the insurer received by its settlement offers to the Burkes. the insured’s “Notice of Claim Uninsured Motorists Coverage The trial court granted Granite City’s motion for summary judg- Underinsured” form. The form provided details about the accident, ment. State Farm appealed and argued that the Michigan employer’s the insured’s injuries, and was signed and notarized. On October vehicle was “principally garaged” at Burke’s home in Illinois and that 6, 2009, the insured demanded arbitration of her uninsured motor Section 143a requires an insurance policy, for a vehicle registered vehicle claim. On October 19, 2009, the insurer denied the claim or “principally garaged” in Illinois, to provide uninsured motorist on the basis that the demand for arbitration was untimely because coverage. The appellate court rejected the argument noting that State it was made more than two years following the accident. Farm failed to consider the limitation in Section 143a to policies In the ensuing coverage litigation, the trial court found that the “renewed, delivered, or issued for delivery in this State.” The policy insured had made a timely demand for arbitration and entered sum- passed through a broker, located in Illinois, but Granite City’s policy mary judgment in her favor. On appeal, the appellate court noted that was “delivered” to the Michigan employer, in Michigan. Section 143.1 of the Illinois Insurance Code tolls limitations periods The appellate court also rejected State Farm’s choice of law within policies “from the date proof of loss is filed, in whatever form argument and applied Michigan law, after noting that the policy is required by the policy, until the date the claim is denied in whole was purchased by a Michigan company, delivered to Michigan, the or in part.” 215 ILCS 5/143.1. According to the court, the insured’s premiums were paid from Michigan and the vehicle was registered submission of her “Notice of Claim Uninsured Motorists Cover- in Michigan. age Underinsured” form on October 17, 2007 constituted a proof After exhausting all of its public policy and statutory arguments, of loss under the policy for purposes of Section 143.1. Therefore, State Farm argued that Granite City waived all policy defenses by the submission of this form tolled the limitations periods until the extending coverage to the Burkes. The claims representative sent a insurer denied the claim on October 19, 2009. As a consequence, letter to Burke informing him that “We will be granting coverage,” the insured’s subsequent demand for arbitration was timely made. even though the claims representative was aware of the policy’s limitation of coverage to employees. Granite City responded that Country Preferred Ins. Co. v. Whitehead, 2016 IL App (3d) 150080.

38 | IDC 2016 SURVEY OF LAW Set Off of Settlement Payments held that a riding lawnmower was a motor vehicle pursuant to section Against UIM Limits 1-146 of the Illinois Vehicle Code, 625 ILCS 5/1-146.

In DeStefano v. Farmers Automobile Insurance Ass’n, the Il- Goldstein v. Grinnell Select Ins. Co., 2016 IL App (1st) 140317. linois Appellate Court, Fifth District, addressed the issue of what settlement amounts could be set off against underinsured motor vehicle limits. The insured was covered by a policy of insurance Underinsured Motorist Limits – that provided $100,000 in underinsured motor vehicle limits. She Multiple Underinsured Drivers was struck by a postal worker whose vehicle had liability limits of $25,000. Following the accident, the insured brought claims against In Illinois Emcasco Insurance Co. v. Tufano, the Illinois Ap- the postal worker and the United States. The postal worker’s insurer pellate Court, First District, held that where two underinsured paid its liability limits of $25,000. The United States paid $49,900 in tortfeasors are involved in a motor vehicle accident, the amount of exchange for a release which extinguished all liability of the United underinsured motorist (UIM) coverage available to the victim is States. It was undisputed that the value of the insured’s personal calculated by adding the gap between the victim’s UIM limit and injury claim exceeded $149,900. The insured’s underinsured mo- the first tortfeasor’s policy limit and the gap between the victim’s tor vehicle coverage allowed her insurer to deduct money paid on UIM limit and the second tortfeasor’s policy limit. behalf of the underinsured driver from the policy’s underinsured Tufano was a passenger in a vehicle being driven by Zienkie- motor vehicle coverage limitations. wicz, which collided with a vehicle being driven by Mann. Tufano In the ensuing coverage litigation, the parties disagreed on the was seriously injured and allegedly incurred damages in excess amount of the reduction to the underinsured motor vehicle limits. of $1,000,000. Zienkiewicz’s State Farm auto policy had a bodily The insurer contended that it could deduct $74,900 (the amount injury limit of $300,000 per person. Mann’s Allstate auto policy had paid by the postal worker’s insurer and the United States) while a bodily injury limit of $100,000 per person. Allstate paid $100,000 the insured asserted that the insurer could only deduct $25,000 (the to Tufano and State Farm paid $295,000 to Tufano. amount paid by the postal worker’s insurer). Tufano was insured under an auto policy with a UIM limit The trial court agreed with the insured, and the appellate court of $500,000 per accident. Since Tufano’s policy limit was greater affirmed. According to the appellate court, because the United States than the individual limits on Zienkiewicz’s and Mann’s policies, paid $49,900 to extinguish all of its liability, it was not paying both Zienkiewicz and Mann were underinsured pursuant to section money on behalf of underinsured motorist. Rather, it was paying 143a-2(4) of the Illinois Insurance Code, 215 ILCS 5/143a-2(4). The to extinguish its own independent liability. As a consequence, the court calculated the amount of UIM coverage available to Tufano insurer could not include this amount within the reduction of limits by adding the difference between Tufano’s $500,000 UIM limit and for the underinsured motor vehicle coverage. Zienkiewicz’s $295,000 payment ($205,000) and the difference between Tufano’s $500,000 UIM limit and Mann’s $100,000 limit DeStefano v. Farmers Auto. Ins. Ass’n., 2016 IL App (5th) 150325. ($400,000). The court rejected the insurer’s argument that its UIM limits of $500,000 should be reduced by the collective amount of payments, $395,000. Since the difference between Tufano’s UIM Underinsured Motorist – Owned Vehicle limits and Zienkiewicz’s and Mann’s individual limits totaled Exclusion – Lawnmower a Motor Vehicle $605,000, the court found that Tufano was entitled to $500,000 in UIM coverage. The court remanded the case for a determination of In Goldstein v. Grinnell Select Insurance Co., the Illinois Appel- whether Tufano’s damages actually exceeded $395,000, the amount late Court, First District, held that an underinsured motorist insurance that Tufano was paid by the tortfeasors’ auto insurers. exclusion that precluded coverage for bodily injury sustained by an insured while occupying a vehicle owned by the insured but not Illinois Emcasco Ins. Co. v. Tufano, 2016 IL App (1st) 151196. described in the policy was enforceable under section 143a-2 of the Illinois Insurance Code. 215 ILCS 5/143a-2. In so ruling, the court noted that while the text of section 143a-2 refers only to uninsured motorist coverage, there is no basis to distinguish uninsured motor- ist coverage from underinsured motorist coverage for purposes of determining whether the exclusion was enforceable. The court also — Continued on next page

IDC 2016 SURVEY OF LAW | 39 Survey of 2016 Insurance Law Cases (Continued)

Policy Conditions Enforceable the $500,000 underinsured motorist coverage was per occurrence Prerequisites to UIM Coverage which had already been exhausted by the primary insurer. The district court granted summary judgment for the insurer and agreed that the In Allstate Insurance Co. v. Mack, the Illinois Appellate Court, policy provided a per occurrence limit. First District, determined that Allstate Insurance Company owed no On appeal, the plaintiffs argued that the policy was ambiguous underinsured motorist (UIM) coverage due to its insured’s breach and must be construed in their favor. At issue were two endorsements, of the policy. In response to the insured’s UIM claim and demand an “Underinsured Motorists Coverage – Illinois” endorsement and for arbitration, Allstate requested HIPAA authorizations and the a “Single Underinsured Motorists Limit” endorsement. The Under- insured’s examination under oath pursuant to the terms of the policy. insured Motorists Coverage – Illinois endorsement provided a per After the insured failed to comply, Allstate sought a declaration that person and per occurrence limit for underinsured motorist claims. it owed no coverage and was granted summary judgment. On appeal, The Single Underinsured Motorists Limit provided a per occurrence the first district considered two policy conditions which required the limit. The plaintiffs argued that the two endorsements were conflict- person making a claim to: 1) give authorization to obtain medical ing rendering the policy ambiguous. The court, however, held that records; and 2) submit to an examination under oath. The appel- both provisions had the same per occurrence limit of $500,000 and late court found the plain language of these provisions to be clear, were therefore consistent and unambiguous. Summary judgment unambiguous and enforceable. was affirmed in favor of the insurer. The first district also rejected the insured’s argument that the American Arbitration Act’s discovery rules preempted the terms of Trotter v. Harleysville Ins. Co., 821 F.3d 916 (7th Cir. 2016). the policy and negated her obligation to comply. To that end, the policy contained a section titled “����If������������������������������� We���������������������������� Cannot Agree,” which pro- vided that any disagreement between the parties was to be settled by TELEPHONE CONSUMER PROTECTION arbitration. Considering this provision, the first district found that this ACT CASES provision “presumes the parties were unable to come to an agreement prior to instituting the arbitration process.” Because there had been TCPA Exclusion Eliminates Coverage no disagreement between the parties, the court found there was no for Common Law Counts in a TCPA Class need to institute arbitration proceedings. The first district, therefore, Action, and Per Claim Deductible for concluded that Allstate was entitled to summary judgment and that it Advertising Injury Coverage must be did not owe UIM coverage due to the insured’s breach of the policy. Applied to the Claims of Each Class Member in a Class Action Settlement Allstate Ins. Co. v. Mack, 2016 IL App (1st) 141171. In First Mercury Insurance Co. v. Nationwide Security Services, Inc., the Illinois Appellate Court, First District, applied a per claim Seventh Circuit Finds Policy Unambiguous deductible for advertising injury coverage to a class action settle- and that Per Accident Limit Applies to ment. The insured’s CGL insurance policy had a $1 million limit Underinsured Motorist Claims of liability for advertising injury coverage, but was also subject to a “deductible liability” endorsement, which provided a $500 “per In Trotter v. Harleysville Insurance Co., the Court of Appeals claim” deductible for property damage liability and for advertising for the Seventh Circuit affirmed the district court’s grant of summary injury liability. Furthermore, according to the terms of the policy, the judgment in favor of the insurer. On July 14, 2011, Donna Powers payment of deductibles reduced the limits of liability for advertis- drove through a stop sign and collided with a motor vehicle, causing ing injury coverage. As such, if one $500 deductible was paid, only injuries to three passengers (Eric Trotter, Connie Jackson, and Caila $999,500 of advertising injury coverage remained under the policy. Petrie) in the other vehicle. Powers’ insurer had limits of $250,000 The insured was subsequently sued in a class action brought per person and $500,000 per occurrence. Powers’ insurer paid Trot- pursuant to the Telephone Consumer Protection Act (TCPA) for ter $250,000, Jackson $238,000, and Petrie $12,000. Following this sending unauthorized faxes. After the insured submitted the claim settlement, the injured parties then sought recovery from the under- under its CGL insurance policy, its insurer defended the insured insured motorist coverage under Trotter’s policy. The plaintiffs in under a reservation of rights and provided the insured with indepen- the underlying suit argued that the underinsured motorist coverage dent counsel due to the presence of a conflict of interest. During the offered $500,000 in coverage per person. The insurer argued that litigation, the insured settled the class action for $4 million, and the

40 | IDC 2016 SURVEY OF LAW insured and the underlying plaintiff sought indemnification from the found that, because Indiana law was unsettled on this issue, insurer. The $4 million settlement was ultimately based on the $500 no actual conflict existed and Illinois law applied. As a result, per unauthorized fax award permitted by the TCPA. because the insurer failed to comply with Section 143.17, the The trial court entered judgment for the insurer, and the ap- TCPA exclusion within its policy was ineffective, and judgment pellate court affirmed. According to the appellate court, the $500 was entered in the insured’s favor. “per claim” deductible pursuant to the policy’s deductible liability On appeal, the appellate court disagreed. First, although the endorsement erased any coverage provided by the policy. The court court recognized that an actual conflict, as opposed to a potential reasoned that the $500 “per claim” deductible must be applied to conflict, was necessary for a choice of law analysis, it found that an the individual claims of each class member, of which there were actual conflict did exist because Indiana law was not unsettled on 3671. Because each deductible reduced the limit of liability for this issue. According to the court, unlike Illinois law, Indiana law advertising injury coverage and the aggregate of the deductibles did not require advance notice of material changes to a policy when totaled $1.85 million, this reduced the available advertising injury the policy is renewed. coverage for the settlement to zero. In reaching this conclusion, the Second, the court found that, under Illinois choice-of-law court rejected the insureds’ argument that the underlying plaintiff principles, Indiana law applied. According to the court, where the class must be treated as a whole, instead of as separate individuals. policy does not have an express choice of law provision, courts Finally, as part of its analysis, the appellate court found that the consider the following factors when evaluating a choice of law ques- policy’s coverage for “property damage” was excluded since any tion involving an insurance policy: (1) the location of the subject alleged property damage was the result of the insured’s intentional matter of the insurance contract; (2) the place of the delivery of the conduct in sending the faxes. insurance contract; (3) the domicile of the insured or the insurer; (4) the place of the last act to give rise to the insurance contract; First Mercury Ins. Co. v. Nationwide Security Services, Inc., 2016 (5) the place of performance; and (6) whether another place bears IL App (1st) 143924. a rational relationship to the insurance contract. In this case, the court found that these factors weighed in favor of the application of Indiana law. Notice of Policy Change – Addition of TPCA Exclusion – Choice of Law Cincinnati Ins. Co. v. Chapman, 2016 IL App (1st) 150919.

In Cincinnati Insurance Co. v. Chapman, the Illinois Ap- pellate Court, First District, reversed a trial court’s decision that Related to Sending Unsolicited Illinois law applied to a dispute between an insured and its insurer. Fax Advertisements The coverage dispute arose out of a class action brought against the insured pursuant to the Telephone Consumer Protection Act In Fayezi v. Illinois Casualty Co., the Illinois Appellate Court, (TCPA), 47 U.S.C. § 227, for allegedly sending unauthorized faxes. First District, held that a policy exclusion for liability “arising After the insurer denied coverage for the class action, the insured out of” the federal Telephone Consumer Protection Act of 1991 settled the class action and agreed to the entry of a judgment against (TCPA), 47 U.S.C. § 227, which prohibits sending unsolicited fax it. The underlying plaintiff then sought to enforce the judgment advertisements, relieved a CGL insurer from defending an underly- against insurer through a citation to discover assets. The insurer ing class action complaint alleging that the insured sent unsolicited filed a declaratory judgment action, asserting that it had no duty fax advertisements and seeking damages under the TCPA, the Il- to pay the settlement. linois Consumer Fraud and Deceptive Business Practices Act, 815 The primary issue concerned whether the insurer gave the ILCS 505/1, and for conversion. Following G.M. Sign, Inc. v. State insured proper notice of the inclusion of a TCPA exclusion Farm Fire & Casualty Co., 2014 IL App (2d) 130593, the appellate within its policy when the insured renewed the policy in 2006. court found that the insurer had no duty to defend because the facts It was undisputed that the insurer failed to give 30 days’ advance pleaded in the underlying complaint that purported to support the notice of the addition of the exclusion to the policy, as required non-TCPA causes of action, which were otherwise covered under by Section 143.17 of the Illinois Insurance Code. If Illinois law the CGL policy, were the same facts that were pleaded in support applied, failure to comply with Section 143.17 would invalidate of the TCPA cause of action. Since all counts in the underlying exclusion. However, the insurer argued that Indiana law applied, complaint were predicated on the insured’s sending of unsolicited and Indiana law did not require advance notice. The trial court — Continued on next page

IDC 2016 SURVEY OF LAW | 41 Survey of 2016 Insurance Law Cases (Continued) fax advertisements, which was prohibited by the TCPA, the court Illinois Cas. Co. v. West Dundee China Palace Restaurant, Inc., found that the TCPA exclusion applied to the entire complaint. 2015 IL App (2d) 150016.

Fayezi v. Illinois Cas. Co., 2016 IL App (1st) 150873. WORKERS’ COMPENSATION

CGL Policy Exclusion for TCPA Claims Separate Illinois Policy Not Required by Negated Any Potential Coverage Section 4(a)(3)

Illinois Casualty Co. v. West Dundee China Palace Restaurant, In Continental Western Insurance Co. Inc. v. Knox County Inc. concerned insurance coverage for a class action filed against the EMS, Inc., an Indiana employee of Knox, an Indiana company, was insured under the Telephone Consumer Protection Act (TCPA), 47 injured in a car accident in Illinois, while in the course and scope U.S.C. § 227, for sending blast faxes. The claimant class asserted of her employment. Workers’ compensation claims were made in claims against the insured, West Dundee China Palace Restaurant, Indiana and Illinois as a result of the accident. Knox had a workers’ Inc., for violation of the TCPA, common law conversion and compensation policy with Continental. The policy required Conti- violation of the Illinois Consumer Fraud and Deceptive Business nental to pay benefits on behalf of Knox as required by Indiana’s Practices Act, 815 ILCS 505/1. Illinois Casualty Company filed for workers’ compensation laws. The policy also required Continental a declaratory judgment that the commercial general liability policy to pay benefits under other states’ workers’ compensation laws issued to the insured provided no coverage for the underlying class provided the employee was not claiming benefits in a state where action lawsuit based on the policy’s exclusion for certain claims Knox, because of its operations in that state, was required to have arising out of the TCPA or any other similar laws. While there separate workers’ compensation coverage in that state. Continental sought a declaration of no coverage for the Illinois was no dispute that the exclusion barred coverage for the claim benefits relying on Section 4(a)(3) of the Illinois Workers’ Compen- under the TCPA, the parties disagreed as to whether this exclusion sation Act, 820 ILCS 305/4(a)(3), which requires, in part, that an applied to the counts for conversion and violation of the Illinois employer “Insure his entire liability to pay such compensation in Consumer Fraud and Deceptive Business Practices Act. Consider- some insurance carrier authorized, licensed, or permitted to do such ing the allegations of the complaint as a whole, the second district insurance business in this State.” Continental and the trial judge determined that the exclusion applied to remove coverage for all interpreted Section 4(a)(3) to require Knox, because of operations three counts because the conduct alleged in the second and third in Illinois, to purchase a separate workers’ compensation policy to counts “constitutes nothing more than a rephrasing of the conduct cover employees’ claims filed in Illinois. As a result, Continental’s alleged in” the count brought under the TCPA. As such, “[a]ll three policy only covered Indiana claims and summary judgment was counts allege[d] property damage arising out of the TCPA, similar entered in favor of Continental. statutes, or orders.” Illinois Cas. Co. v. West Dundee China Palace Knox appealed and contested the jurisdiction of the trial court Restaurant, Inc., 2015 IL App (2d) 150016, ¶ 20. to hear the declaratory judgment action and the court’s interpretation The insured asserted several arguments in an attempt to impose of Section 4(a)(3). The appellate court found that the trial court had a duty to defend. The insured argued that the underlying complaint jurisdiction over the declaratory action because no factual issues was vague and left open the possibility of coverage, giving rise to a relating the benefits, the nature and extent of injuries or defenses duty to defend. The court disagreed, finding no factual uncertainty to benefits were involved in the declaratory action. Additionally, in the underlying complaint that would trigger the duty to defend. an interpretation of the phase “insure his entire liability” did not The insured also argued that the exclusion was inapplicable based require any specialized knowledge of the Workers’ Compensation on the phrase “arising from.” Specifically, the insured argued that the Commission. The appellate court disagreed with the trial court’s phrase “arising from” should be construed as a “proximate cause” interpretation that “Insure his entire liability” required the employer requirement, narrowing the scope of the exclusion. Considering to have a separate policy of workers’ compensation insurance in the definition of the term “���������arise,����������������������������������������”���������������������������������� however,�������������������������������� the second district de- Illinois. The court found nothing in the language of Section 4(a) termined that the plain language of the exclusion barred coverage (3) that required a separate policy covering only Illinois claims and for the allegations in the underlying complaint. Accordingly, the relied upon a Maryland case to support its interpretation. See Zurich court affirmed the trial court’s judgment, finding the policy barred American Insurance Co. v. Uninsured Employers’ Fund, 13 A.3d 98 coverage for the underlying claim against the insured. (Md. Ct. Spec. App. 2011). Summary judgment for Continental was reversed.

42 | IDC 2016 SURVEY OF LAW Continental Western Ins. Co., Inc. v. Knox County EMS, Inc., 2016 On appeal, the appellate court affirmed the decision on the IL App (1st) 143083. duty to defend but reversed the decision on the duty to indemnify. It determined that the underlying workers’ compensation claims trig- gered LM Insurance Corporation’s duty to defend. The court noted Employee Leasing Endorsements that the underlying claimants alleged that they “were injured during Triggered Even Though Injured Claimants the scope of their employment” and, at the time of their injuries, Were Not Employees of Leasing Company – the policy “provided workers’ compensation insurance to those em- Commission Must Find Employer ployees leased by B&R to its clients.” LM Insurance Corp. v. B&R Liability Before Court Can Determine Insurance Partners, LLC, 2016 IL App (1st) 151011, ¶ 19. These Duty to Indemnify allegations were sufficient to bring the claims within the potential coverage of the policy and trigger a duty to defend. In LM Insurance Corp. v. B&R Insurance Partners, LLC, The appellate court then considered whether the trial court the Illinois Appellate Court, First District, held that the Illinois prematurely decided the issue of indemnification because the ques- Workers’ Compensation Commission (the Commission) must tion of indemnification depended on a finding of employer liability determine issues associated with employer liability, even if that on the part of B&R Insurance. According to the court, “the issue determination is necessary to evaluate coverage under a workers’ of employer liability is a decision for the Commission to make.” compensation policy. As a result, while B&R Insurance and its clients asserted that a B&R Insurance Company applied for a workers’ compensa- co-employment arrangement existed, the issue of indemnification tion policy as a professional employer organization—which is an had to await the Commission’s determination of employer liability, organization that leases its employees to others on a long-term including whether the employer liability fell onto a single employer temporary basis. LM Insurance Corporation issued the policy and or was joint and several between co-employers. included several employee leasing endorsements, which extended coverage to leased employees provided to B&R’s clients under an LM Ins. Corp. v. B&R Ins. Partners, LLC, 2016 IL App (1st) employee leasing arrangement. To qualify for coverage under the 151011. employee leasing endorsements, the employees ultimately had to be B&R Insurance Company employees. B&R Insurance entered into agreements with its clients wherein the parties were purportedly BROKERS, AGENTS AND PRODUCERS “co-employers” of leased employees. Under these agreements, B&R Insurance was the “administrative employer” and the clients were Directors’ and Officers’ – Securities the “operational employers.” Exclusion and Broker’s Liability In October 2013, five employees of two B&R Insurance cli- ents filed workers’ compensation claims. In November 2013, LM The Robert R. McCormick Foundation and the Cantigny Foun- Insurance Corporation cancelled the policy. During the cancellation, dation, maintained a directors’ and officers’ liability policy with LM Insurance Corporation conducted an audit of B&R Insurance’s Chubb Insurance. Arthur J. Gallagher Risk Management Services, payroll to determine B&R Insurance’s final premium. During the Inc. was the broker that procured the coverage for the Foundations. audit, LM Insurance Corporation discovered that B&R Insurance Several years before the underlying lawsuits were filed against did not file any payroll for employees “leased” to its clients because them, Gallagher advised the Foundations that they could get identical all of its clients paid payroll under their own federal Employer D&O coverage from Chartis, (described as “apples to apples”), for Identification Numbers. a cheaper premium. The Foundations followed Gallagher’s advice LM Insurance Corporation then filed a complaint for de - and purchased a D&O policy from Chartis and allowed the Chubb claratory judgment against B&R Insurance and its clients. The policy to lapse. complaint alleged that LM Insurance had no duty to defend or Shortly thereafter, various unsecured creditors of the Tribune indemnify B&R or its clients for the five workers compensation Company filed multiple suits against many former shareholders of claims because the employees were not actually B&R Insurance the company, including the Robert R. McCormick Foundation and employees and, thus, the employee leasing endorsements did not the Cantigny Foundation, seeking damages as the result of a previ- cover the claims. The trial court entered summary judgment in ous leveraged buyout of the Tribune Company which, subsequent favor of B&R Insurance and its clients on all counts, finding a to the buyout, entered bankruptcy. The Foundations tendered the duty to defend and indemnify. — Continued on next page

IDC 2016 SURVEY OF LAW | 43 Survey of 2016 Insurance Law Cases (Continued) defense of the suits to Chartis. Chartis denied coverage based on a involved in an auto accident. Thereafter, the plaintiff requested that securities exclusion in its policy. his fiancé be added to his automobile insurance policy. After the The Foundations proceeded to pay their defense costs and policy was issued, the fiancé’s son was struck by a vehicle while filed suit against Gallagher for malpractice, alleging that the Chubb riding his bicycle and seriously injured. The driver who struck the policy would have provided coverage for the lawsuits and that they son had policy limits of $25,000. Plaintiff then made a demand would not have changed policies if they had known the coverages under his policy for underinsured motorist coverage for injuries to were not identical. his fiancé’s son. The claim was denied because neither the fiancé Gallagher’s defense was that Chubb’s policy contained a securi- nor the son had been added to the policy. Plaintiff and the fiancé ties exclusion which would also have excluded coverage. The trial then filed suit against the agent for failing to procure the requested court agreed with Gallagher and granted its motion for summary insurance coverage. judgment and the Foundations appealed. The agent and the insurer moved to dismiss the suit claiming Chubb’s policy excluded claims based on a “violation of any that they owed no duty to the insured to procure the policy. The trial Securities Law” which it defined as the Securities Act of 1933, the court granted the motions to dismiss and the plaintiffs appealed. The Securities Exchange Act of 1934, the Investment Company Act of appellate court reversed and concluded that the agent, a captive agent 1940, any state or federal securities law or regulations and “any other for Country Casualty Insurance Co., was an “insurance producer” provision of statutory or common law used to impose liability in under Section 500-10 of the Illinois Insurance Code, 215 ILCS connection with the offer to sell or purchase, or the sale of purchase, 5/500-10, and owed a duty under Section 2-2201 which applied to of securities.” The Chartis policy’s securities exclusion excluded all “insurance producers.” The agent and insurer filed a petition for claims “in any way relating to any purchase or sale of securities.” leave to appeal to the supreme court, which was granted. Gallagher interpreted “any other provision” to mean any other Illinois law has long recognized a distinction between an in- provision of law, whereas the Foundations, applying the principle surance broker and a captive agent. Historically, a broker acts as a of ejusdem generis, interpreted it to mean any other provision like middleman between an insured and an insurer and assists the insured the enumerated securities laws. in procuring insurance policies from a variety of insurers which best The appellate court found “any other provision” to be suscep- suits the insured’s needs. A captive agent, conversely, was beholden tible to both interpretations and therefore ambiguous. Because of to the insurer and had certain duties and allegiances to the insurer. the ambiguity, it construed the language in favor of the Founda- The Supreme Court explained that these distinctions are not changed tions and limited the scope of Chubb’s exclusion to claims based by holding that captive insurance agents are “insurance producers” on violation of actual securities laws. None of the lawsuits against under Section 2-2201. Rather, captive agents are merely required to the Foundations alleged violations of securities laws. The lawsuits use ordinary care and skill in obtaining coverage requested by the alleged breach of fiduciary duties and fraudulent conveyances. As insured or proposed insured. a result, the appellate court concluded that the Foundations would Moreover, the court found that the insurer can be liable for the have had coverage under the Chubb policy and reversed the sum- actions of the captive agent under theories of respondeat superior. mary judgment in favor of Gallagher. The Supreme Court affirmed the appellate court’s ruling which reversed the trial court’s grant of the insurer’s and agent’s motions Robert R. McCormick Foundation v. Arthur J. Gallagher Risk Mgmt. to dismiss. Services, Inc., 2016 IL App (2d) 150303. Skaperdas v. Country Casualty Ins. Co., 2015 IL 117021.

Supreme Court Holds that Captive Agents and Brokers Are Considered Insured’s Failure to Procure Insurance “Insurance Producers” Under Code of Civil Claim against Broker Accrues at Declination Procedure Section 2-2201 Scottsdale Insurance Co. v. Lakeside Community Committee In Skaperdas v. Country Casualty Insurance Co., the Illinois involved the question of when an insured’s claim against its insur- Supreme Court held that a captive agent was an insurance producer ance broker for negligent failure to procure insurance “accrued” for under Section 2-2201 of the Code of Civil Procedure, 735 ILCS purposes of the statute of limitations. The insured’s insurance carrier 5/2-2201, and therefore owed a duty of ordinary care and skill in declined coverage for an underlying claim against the insured for procuring an insurance policy. The plaintiff insured’s fiancé was the wrongful death of a two-year old child. The parties agreed that

44 | IDC 2016 SURVEY OF LAW the two-year statute of limitations set forth in section 13–214.4 of settlement. The trial court entered judgment for Auto-Owners in the the Code of Civil Procedure, 735 ILCS 5/13-214.4, applied to the amount of $28,000.38 and Konow appealed. insured’s negligent procurement claims against the broker. The Auto-Owners’ insureds sustained serious injuries in an auto- statute provides that: mobile accident with Konow. The claims were settled for Konow’s insurance limits of $3,000,000. Auto-Owners’ insured executed a All causes of action brought by any person or entity release of all claims including property damage. The insureds’ at- under any statute or any legal or equitable theory against torney sent a letter to Konow’s attorney indicating all lien claims an insurance producer, registered firm, or limited insurance had been resolved and requesting a check payable to Auto-Owners representative concerning the sale, placement, procure- in the amount of $3,333.33. The check was issued with the words ment, renewal, cancellation of, or failure to procure any “[i]n full and final settlement of any and all claims” next to the policy of insurance shall be brought within 2 years of the insureds’ endorsements. (In a related appeal from a suit between date the cause of action accrues. Auto-Owners and its insureds, the appellate court, in an unpublished decision, held that the release did not foreclose Auto-Owners from The agent cited Hoover v. Country Mutual Insurance Co., 2012 its subrogation rights against Konow. (Bettag v. Konow, 2011 IL App IL App (1st) 110939, for the proposition that the insured’s cause of (2d) 101188-U.) Auto-Owners endorsed the check and included the action “accrued” when the policy was obtained, not when the carrier words, “All Rights Reserved.” declined coverage. Because the insured did not file suit for more In defense of Auto-Owners subrogation action, Konow argued than two years after the policy was obtained, the carrier argued that that Auto-Owners’ acceptance of the check that was issued as part the claim for negligent failure to procure was barred. of the settlement with the insureds was an accord and satisfaction The Illinois Appellate Court, First District, disagreed. It distin- of all claims which extinguished the subrogation claim. The appel- guished Hoover by pointing out that the policyholder in that case late court looked to Section 3-311 of Illinois’ Uniform Commercial actually sought a specific provision in its insurance policy. That Code (Negotiable Instruments), 810 ILCS 5/3-311, and noted that provision’s omission from the policy would have been discovered a tender as full satisfaction of a claim must be made in good faith. had the insured read the policy. In the present case, the insured, The court found no evidence that Konow had a good faith basis Lakeside, hired the insurance broker to procure a policy that would to believe a payment of $3,333.33 would include satisfaction of a cover multiple types of claims. Even if Lakeside had read the policy, medical payment claim of $5,000 and a property damage claim of the first district believed that it would not have known that a wrong- over $27,000. Additionally, the court found no evidence of any ne- ful death claim was not covered until such a claim was denied. It gotiations between Konow and Auto-Owners relating to the property held that Lakeside’s claim against its broker did not “accrue” until damage claim before the check was issued at the direction of the coverage was denied, or in the alternative, that that “discovery rule” insureds’ attorney. The judgment for Auto-Owners was affirmed. delayed the commencement of the statute of limitations period until Lakeside learned of the denial. Auto-Owners Ins. Co. v. Konow, 2016 IL App (2d) 150860.

Scottsdale Ins. Co. v. Lakeside Community Committee, 2016 IL App (1st) 141845. Replevin to Recover Insured Vehicle from Tow Truck Operator – Notice Requirement

SUBROGATION State Farm’s insured was involved in an auto accident on No- vember 5, 2012. A tow truck operator, Loop Operations, arrived at Property Damage Subrogation – the scene and towed the insured’s car to a safety lot. State Farm paid Effect of Bodily Injury Settlement the insured for the car and took an assignment of the title. Loop Operations sent State Farm a bill for towing and storage. In Auto-Owners Insurance Co. v. Konow, an underlying bodily State Farm responded by mailing a formal demand for the car to the injury claim was settled and a portion of the proceeds paid to Auto- address for Loop Operations listed on the towing and storage bill. Owners to satisfy its lien for medical payments made under its State Farm sent a second demand for the car listing various statutes policy. When Auto-Owners proceeded with its subrogation claim for it believed to have been violated by Loop Operations. It also sent property damage to its insured’s vehicle, defendant Konow argued a separate demand for the car to Loop Operations’ attorney. State that the subrogation claim had been extinguished by the bodily injury — Continued on next page

IDC 2016 SURVEY OF LAW | 45 Survey of 2016 Insurance Law Cases (Continued)

Farm refused to pay Loop Operations’ bill for towing and storage. employees’ causes of action did not accrue until more than five years Loop Operations sent State Farm another demand for payment after dissolution, they had no viable claims against the dissolved using a post office box as its return address. State Farm responded corporation or its shareholders. As a result, according to the third to a new street address for Loop Operations, refusing payment and district, the employees’ suit could only be viewed as a direct action demanding the car. against an insurer, which is prohibited under Illinois law. The third Ultimately, in November of 2013, State Farm filed a complaint district rejected the employees’ invitation to create an equitable cause which included a count for replevin. The owner of Loop Operations of action allowing individuals injured by a dissolved corporation’s was deposed and admitted that he knew of State Farm’s demand for conduct to reach the liability insurance of the dissolved corporation return of the car in December 2012. when their causes of action do not accrue until more than five years Even though State Farm complied with the statutory notice after the corporation’s dissolution. provisions for the replevin action by demanding return of the vehicle and giving notice of the hearing, the trial court denied the replevin Adams v. Employers Ins. Co. of Wausau, 2016 IL App (3d) 150418. remedy because the judge did not believe the statutory notice pro- visions adequately protected Loop Operations’ due process rights. The appellate court reversed, finding that the trial judge’s imposition ADDITIONAL INSURED COVERAGE of additional notice requirements beyond those in the statute was a violation of the doctrine of separation of powers and exceeded Third Party Complaints Cannot Be his authority. Considered When Determining Whether an Additional Insured Endorsement State Farm Mutual Automobile Ins. Co. v. Loop Operations, 2016 is Triggered IL App (1st) 151545. In Pekin Insurance Co. v. Illinois Cement Co., LLC, the Illinois Appellate Court, Third District, affirmed a summary judgment order, DIRECT ACTION holding that an insurer did not have an obligation to defend a prem- ises owner under an additional insured endorsement. A contractor Direct Action against an Insurer entered into a contract with a premises owner to install a trash pump Disallowed Even Where Underlying at the premises owner’s facility. As part of the agreement between Insured was Dissolved the parties, the contractor added the premises owner as an additional insured to the contractor’s commercial liability insurance policy. In Adams v. Employers Insurance Co. of Wausau, the Illinois The additional insured endorsement, however, precluded coverage Appellate Court, Third District, affirmed the dismissal of a complaint for “[l]iability for ‘bodily injury’ or ‘property damage’ arising out for declaratory judgment as an improper direct action against an of or in any way attributable to the claimed negligence or statutory insurance company. The defendants included the liability insurers violation of the Additional Insured, other than vicarious liability of an insulating contractor that had dissolved in 2003 as well as which is imputed to the Additional Insured by virtue of the acts or former shareholders of the contractor. The plaintiffs were the for- omissions of the Named Insured.” Pekin Insurance Co. v. Illinois mer employees of the dissolved contractor claiming that they had Cement Co., LLC, 2016 IL App (3d) 140469, ¶ 6. asbestos-related diseases caused by exposures occurring during their After one of the contractor’s employees slipped and fell during employment. In their declaratory judgment action, the employees the installation of the trash pump, the employee sued the premises sought a declaration that they could sue the former shareholders owner. The complaint against the premises owner was based solely as nominal defendants to establish liability against the dissolved on the premises owner’s alleged negligence. The premises owner corporation and then sought a declaration that the dissolved corpora- then filed a third party complaint against the contractor, which al- tion’s liability insurers had a duty to defend and indemnify. It was leged that the premises owner was being held vicariously liable for undisputed that the employees’ causes of action accrued more than the contractor’s own negligence. five years after the contractor’s dissolution. The appellate court found that the insurer had no duty to defend In reaching its decision, the third district noted that Section the premises owner under the additional injured endorsement and 12.80 of the Business Corporation Act of 1983, 805 ILCS 5/12.80, rejected the premises owner’s attempt to trigger coverage through precludes actions against dissolved corporations and its sharehold- the third party complaint. According to the court, the underlying ers commenced five years or more after dissolution. Because the complaint against the premises owner was based solely on the prem-

46 | IDC 2016 SURVEY OF LAW ises owner’s own negligence and did not allege that the premises with Erie; and (5) Erie was prejudiced by the delay since discovery owner was vicariously liable for the contractor’s negligence. As a was almost complete by the time Hartz’ tendered its defense. Sum- consequence, the additional insured endorsement did not provide mary judgment for Erie because of late notice by the additional coverage. In reaching its decision, the appellate court cautioned that insured was affirmed. the trial court should not rely on the additional insured’s self-serving allegations in a third-party complaint as the sole basis for finding AMCO Ins. Co. v. Erie Ins. Exchange, 2016 IL App (1st) 142660. that an additional insured endorsement limiting coverage to the ad- ditional insured’s vicarious liability was triggered. DISCOVERY Pekin Ins. Co. v. Illinois Cement Co., LLC, 2016 IL App (3d) 140469. Defense Counsel’s Failure to Supplement Interrogatory Answers Regarding Additional Insured – Available Insurance Precludes Insurer Untimely Notice to Additional Insurer from Relying on Policy Sublimit

In AMCO Insurance Co. v. Erie Insurance Exchange, a con- In Harwell v. Fireman’s Fund Insurance Co. of Ohio, the Illinois struction worker was injured and filed suit against the general Appellate Court, First District, held that a defense lawyer’s failure contractor, Hartz, and subcontractors, Cimarron and VDL. Hartz to supplement answers to interrogatories reflecting the limits of li- had a policy with Cincinnati Insurance. Cimarron had primary and ability of the defendant’s insurance policy constituted a waiver of the excess policies with AMCO and VDL was insured by Erie. Hartz, insurer’s right to assert a lower limit of liability. The insured’s CGL as additional insured, tendered its defense to AMCO and Erie. Both insurer agreed to defend its insured in an underlying lawsuit under insurers accepted the defense. a reservation of rights and retained defense counsel. In answering AMCO settled the underlying claim against Hartz for interrogatories for the insured in 2007, the insurer-retained defense $1,450,000. It paid $1,000,000 on behalf of Hartz and $450,000 on attorney responded that the insured’s CGL policy was subject to a behalf of Cimarron. The payment for Hartz consisted of $550,000 $1,000,000 policy limit. In 2008, however, the CGL insurer asserted from AMCO’s primary policy and $450,000 from AMCO’s excess that a $50,000 sublimit applied to the claim. The defense attorney policy. Erie settled on behalf of VDL for $5,000. never supplemented the interrogatory responses to reflect the CGL AMCO filed a declaratory judgment action against Cincinnati insurer’s new position regarding the sublimit. Citing Illinois Supreme and Erie seeking contribution towards the settlement. Cincinnati Court Rule 213(i), which requires a party to seasonably supplement moved to dismiss on the grounds that Hartz never tendered the interrogatory answers when new information becomes known, the claim to Cincinnati so its policy was not triggered. The trial court appellate court held that the CGL insurer was responsible for the fail- granted Cincinnati’s motion and was affirmed on a separate appeal. ure to supplement the interrogatory answers and, therefore, could not (See AMCO Insurance Co. v. Cincinnati Insurance Co., 2014 IL rely on the $50,000 sublimit. The court found that the CGL insurer App (1st) 122856.) Erie moved for summary judgment, contending was bound by the 2007 interrogatory answers because the adjuster that Hartz failed to give timely notice, that Hartz’s liability did not had not informed the retained defense attorney about the sublimit. arise out of VDL’s work and that VDL’s work had been completed before the accident. The trial court granted summary judgment in Harwell v. Fireman’s Fund Ins. Co. of Ohio, 2016 IL App (1st) favor of Erie because Hartz’s notice to Erie was untimely. The trial 152036. court did not address any additional arguments. AMCO appealed. The appellate court noted that Hartz did not tender its defense to Erie for almost three years after the accident date. The record Insurer Compelled to Answer Broad Written showed that Erie did not have “actual notice” of the suit against Discovery in First Party Arson Case its own insured, VDL, until 16 months after the accident date. The appellate court examined five factors to determine whether Hartz’s In Zagorski v. Allstate Insurance Co., the parties became delay in giving notice was reasonable and found all five factors to engaged in several disputes regarding written discovery, which be in favor of Erie: (1) the policy required notice; (2) Hartz was a ultimately resulted in an appeal to the Illinois Appellate Court Fifth sophisticated insured; (3) Hartz knew of the underlying suit; (4) District. The plaintiffs suffered a fire at their home five days after Hartz failed to exercise diligence in identifying its available coverage — Continued on next page

IDC 2016 SURVEY OF LAW | 47 Survey of 2016 Insurance Law Cases (Continued) obtaining a homeowners’ insurance policy from defendant. The de- FIDELITY BONDS fendant insurer investigated the claim with the assistance of counsel and conducted examinations under oath of the plaintiffs. About four Limitations Period in Crime Bond Not months after the fire, the claim was denied as an intentional act. Subject to Tolling under Insurance Code The plaintiffs filed suit for breach of contract, common law fraud, and “bad faith” under Section 155 of the Illinois Insurance Code, The appellate court, in Independent Trust Corp. v. Kansas Bank- 215 ILCS 5/155. ers Surety Co., enforced a limitations period set forth in the crime During written discovery, the plaintiffs served interrogatories bond at issue, barring suits brought after a certain period of time. seeking information regarding other Section 155 claims within the Independent Trust Corporation (Intrust) purchased a crime bond past five years, refusals to pay other fire loss claims, policy manuals from Kansas Bankers Surety Co. (Kansas Bankers), which provided or claims handling documents, and claims against the insurer with fidelity indemnification for certain losses resulting from dishonest the Department of Insurance. The defendant objected to all of these or fraudulent acts of employees. After lengthy legal proceedings, requests with the same boilerplate objection: “Objection. Defendant the trial court granted summary judgment for Kansas Bankers and objects on the grounds that this interrogatory is over-broad, unduly held that it had no obligation to indemnify Intrust under the crime burdensome, harassing, seeks information which is irrelevant and bond based on the bond’s time limitation provision. not calculated to lead to the discovery of admissible evidence, and The bond included a time limitation provision prohibiting seeks information protected by the work-product and attorney-client Intrust from bringing a legal proceeding for the recovery of a loss, privileges.” Zagorski v. Allstate Insurance Co, 2016 IL App (5th) “after the expiration of 24 months from the discovery of such loss.” 140056, ¶ 7. Intrust conceded that it did not bring its suit against Kansas Bankers Moreover, the plaintiffs requested to depose the defendant’s for indemnification under the crime bond until more than 24 months counsel because he also represented defendant during the investiga- after the discovery of the loss, but argued that the limitations period tion of the claim. The trial court denied the deposition request, but should have been tolled, by Section 143.1 of the Illinois Insurance permitted the plaintiffs to serve supplemental interrogatories seeking Code, 215 ILCS 5/143.1, until Kansas Bankers denied the claim. specific information such as the date the attorney was hired and his Section 143.1 of the Insurance Code tolls the running of a policy’s hourly rate. Supplemental interrogatories were served conforming limitation period until the time of a denial, but includes exceptions to the trial court’s order, but the defendant objected to them. for certain types of insurance, including fidelity insurance. Thus, the The trial court ordered that some of the interrogatories and appellate court had to decide whether the bond constituted fidelity supplemental interrogatories be answered, but upheld some of the insurance so as to fall within the exceptions set forth in Section 143.1. defendant’s objections. Defendant refused to comply with the trial The appellate court analyzed the nature of the bond, (examin- court’s order and a “friendly” contempt order was entered allowing ing the origin of financial institution bonds), the term“ fidelity” and for an interlocutory appeal. the crime bond itself. The appellate court considered that financial On appeal, the court admonished litigators for the use of boil- institution bonds originally offered multiple lines of insurance, in- erplate objections and grounds for objections which are abandoned cluding fidelity, within one bond. The court then took into account or never intended to be relied upon. In this case, despite the litany the nature of fidelity insurance, “a form of insurance in which the of grounds, defendant apparently only made arguments in terms insurer undertakes to guaranty the fidelity of an officer, agent, or of relevance. The court held that when determining whether an employee of the insured, or to indemnify the latter for losses caused insurer’s conduct is vexatious and unreasonable under the totality by dishonesty or a want of fidelity….” Independent Trust Corp. v. of the circumstances, a court could consider the improper claims Kansas Bankers Surety Co., 2016 IL App (1st) 143161, ¶ 38. Lastly, practices delineated under Section 154.6 of the Illinois Insurance the appellate court examined the bond itself, entitled a “Financial Code. 215 ILCS 5/154.6. The court indicated that the interrogatories Institution Crime Bond,” and other court decisions recognizing that in this matter were therefore relevant to the allegations and ordered a “financial institution bond” is synonymous with a“ fidelity bond.” defendant to answer them, but the court agreed with the defendant Ultimately, it concluded that the bond qualified as fidelity insurance, regarding the supplemental interrogatories relating to defendant’s and thus, the exception to the tolling of the limitations period set attorney and upheld defendant’s objections to those. The contempt forth in Section 143.1 of the Code applied. Intrust, therefore, failed order and monetary sanctions were vacated. to timely file suit against Kansas Bankers Surety Company.

Zagorski v. Allstate Ins. Co., 2016 IL App (5th) 140056. Independent Trust Corp. v. Kansas Bankers Surety Co., 2016 IL App (1st) 143161.

48 | IDC 2016 SURVEY OF LAW About the Authors insurance law committee

R. Howard Jump of Jump & Associates, P.C. practices in all areas of insurance defense and coverage at the trial and appellate levels. He is a past president of the Seth D. Lamden, Chair Illinois Association of Defense Trial Counsel. He is a long time member of the IDC’s Insurance Law Committee and Neal, Gerber & Eisenberg LLP, Chicago served as its Board Liaison. He has been a contributing 312-269-8052 author of articles on insurance coverage issues for the [email protected] IDC Quarterly and newsletters for the Insurance Law Committee. He re- ceived the IDC’s Distinguished Member Award in 2008. Mr. Jump is also a member of the American, Illinois and Chicago Bar Associations, the Defense Research Institute and the Association of Defense Trial Attorneys. Michael L. Young, Vice Chair Patrick D. Cloud is an attorney in Heyl, Royster, Voelker HeplerBroom LLC, St. Louis & Allen, P.C.’s Edwardsville office. Mr. Cloud concentrates 314-480-4152 his practice on insurance coverage litigation, toxic tort matters, complex civil litigation, and products liability [email protected] defense. As part of his practice, he takes a lead role in significant pretrial discovery, motions and briefs, such as those involving federal preemption, forum non conve- niens, the Illinois Frye doctrine, consumer fraud, and insurance coverage MEMBERS litigation pending throughout the Midwest. Andrew Bell Hinshaw & Culbertson LLP

Michael L. Young is a partner with the St. Louis office of Daniel J. Berkowitz Aronberg Goldgehn Davis & Garmisa, LLC HeplerBroom LLC,h wit a primary emphasis in the practice of insurance law. He represents both insureds and insurers Alex Blair Lindsay, Rappaport & Postel, LLC in complex insurance coverage matters at all stages of the C. Wm. Busse, Jr. Busse, Busse & Grassé, P.C. claims process. Mr. Young’s litigation practice also includes the defense of personal injury, products liability, and white Patrick D. Cloud Heyl, Royster, Voelker & Allen, P.C. collar criminal defense matters. Mr. Young obtained his law degree from Saint Louis University, summa cum laude, in 2002, where he James P. DuChateau HeplerBroom LLC was the Valedictorian of his class. While in law school, Mr. Young served as John Eggum Foran Glennon Palandech Ponzi & Rudloff, PC a Staff Member for the Saint Louis University Law Journal in 2000–2001. He received his Bachelor of Arts degree in 1999 from Washington University in Terry A. Fox Flaherty & Youngerman, P.C. St. Louis, Missouri, summa cum laude, majoring in History. Jamie L. Hull Cassiday Schade LLP

Andrew Bell is a senior associate in the Peoria office Katherine E. Jacobi HeplerBroom LLC of Hinshaw & Culbertson LLP. He practices medical malpractice defense. Recently, Mr. Bell instructed the Gabriel R. Judd Johnson & Bell, Ltd. Courtroom Testimony Course for the Illinois Chapter R. Howard Jump Jump & Associates, P.C. of the International Association of Arson Investigators. He obtained his law degree from Saint Louis University William K. McVisk Johnson & Bell, Ltd. School of Law. In addition, Mr. Bell received a Bachelor’s in Business Administration from Robert Morris University and a Master’s in R. Mark Mifflin Giffin, Winning, Cohen & Bodewes, P.C. Business Administration from Bradley University. Arsenio L. Mims Sandberg Phoenix & von Gontard, P.C.

Seth D. Lamden is a litigation partner at Neal, Gerber & Stephen M. Murphy Sandberg Phoenix & von Gontard, P.C. Eisenberg LLP in Chicago. He concentrates his practice John P. O’Malley Schuyler Roche Crisham, P.C. on representing corporate and individual policyholders in coverage disputes with their insurers. In addition to dispute Britta Sahlstrom SmithAmundsen, LLC resolution, Mr. Lamden counsels clients on matters relating to insurance and risk management, including maximizing Bruce H. Schoumacher Querrey & Harrow, Ltd. insurance recovery for lawsuits and property damage, Gregory G. Vacala Rusin & Maciorowski, Ltd. policy audits and procurement, and drafting contractual insurance specifica- tions and indemnity agreements. He obtained his B.A. from Brandeis Uni- Christine Yurchik Bruce Farrell Dorn & Associates versity and his J.D., magna cum laude, from The John Marshall Law School.

IDC 2016 SURVEY OF LAW | 49 Survey of Local Government Law Cases

Summary Judgment Affirmed on Trip to the surrounding sidewalk.” Burns v. City of Chicago, 2016 IL and Fall Based on de minimis Theory, App (1st) 151925, ¶ 51. Lack of Constructive Notice and Open and Obvious Doctrine Burns v. City of Chicago, 2016 IL App (1st) 151925.

The ADA directs cities to install detectable warning surfaces where a sidewalk ends and a roadway begins at crosswalks to provide No Willful and Wanton Conduct in a sensory cue to blind individuals. In Burns v. City of Chicago, Bicyclist Wrongful Death Case the plaintiff filed suit against the City after he was injured when he tripped and fell over the sensory tiles at such a crosswalk. The In order to get around the protections of the Local Governmen- complaint alleged that the City (1) negligently installed the ADA tal and Governmental Employees Tort Immunity Act, the plaintiffs sensory tiles which were ¾ to 1½ inch above the grade of the side- often assert, in conclusory manner, that the governmental entity’s walk; (2) failed to inspect the area of the sidewalk where he tripped; conduct was willful and wanton. As demonstrated in Lorenc v. (3) failed to repair that portion of the sidewalk; and (4) failed to Forest Preserve District of Will County, a good practice tip is to warn him of the dangerous nature of the sensory tiles. The trial court force the plaintiff to specify what conduct was willful and wanton. dismissed the failure-to-warn allegation because section 3-104 of In Lorenc, the plaintiff filed suit against the forest preserve the Tort Immunity Act precluded liability for the City’s failure to district after her husband was killed during a bicycle riding event provide barricades or warning signs in pedestrian areas. The trial conducted by the district. The district used volunteers to monitor the court then granted the City’s motion for summary judgment on the trail for the safety of the participants. These volunteers were specifi- other three allegations. cally told to stay off the trail in order to avoid a collision. Later, a The appellate court affirmed the trial court’s decision, reason- volunteer stepped onto the trail and waved his arms for the cyclists ing that the City was immune from liability for the plaintiff’s injury. to stop. The decedent, who was not wearing a helmet, swerved and The appellate court first determined that the condition was de mi- fell off his bike. He died shortly thereafter. nimis because the height of the raised tiles was insubstantial and The plaintiff asserted that the district was guilty of willful and no aggravating factors existed. The appellate court then upheld the wanton conduct because the volunteer acted with conscious indif- dismissal of the plaintiff’s failure-to-warn allegation because the ference or utter disregard for the safety of the ride’s participants. City’s duty, to maintain its property in a reasonably safe condition, The district filed two motions to dismiss, claiming (1) the plaintiff’s does not extend to creating or erecting public improvements. The allegations were insufficient to satisfy the statutory definition of will- appellate court then held that the City was not liable because it did ful and wanton conduct; and (2) the district was absolutely immune not have actual or constructive notice of the sidewalk’s condition, from liability under the discretionary immunity provisions in the citing 745 ILCS 10/3-102(a) (West 2010). The court pointed out Local Governmental and Governmental Employees Tort Immunity that constructive notice exists when the condition is so evident, Act (the Act), 745 ILCS 10/2-201 (West 2012). The circuit court plainly visible, or has existed for such duration of time that the granted both of the district’s motions. public entity should have known of its existence by exercising The trial court’s decision was affirmed at the appellate level. In reasonable care and diligence. Further, the party claiming notice particular, the appellate court determined that the plaintiff failed to also has the burden of proving notice. Finally, the appellate court present evidence that the monitor’s actions, though incompetent, rose determined that the City was not liable for the plaintiff’s injuries to the level of willful and wanton conduct and, therefore, dismissal because a reasonable person in the plaintiff’s shoes, exercising per section 2-615 of the Code of Civil Procedure, 735 ILCS 5/2-615 ordinary perception, intelligence, and judgment, would recognize (West 2014), was proper. The appellate court looked at the statutory the tiles and ramp incline as he approached it. “The tiles, by de- definition of willful and wanton: “a course of action which shows an sign, are open and obvious to reasonable people as well as visually actual or deliberate intention to cause harm or which, if not inten- impaired people because of their different color and consistency tional, shows an utter indifference to or conscious disregard for the

50 | IDC 2016 SURVEY OF LAW safety of others or their property.” 745 ILCS 10/1-210 (West 2012). Rosado spent the next year and half in jail fighting the criminal The court also noted Thurman v. Champaign Park District, 2011 IL charges. In February 2014, he received a copy of the dash cam video App (4th) 101024, ¶ 10, which explained that “[w]illful and wanton taken the evening he was arrested, which, contrary to the officers’ conduct is established where the public entity has been informed of accounts, showed that Rosado had used his turn signal and it was a dangerous condition, knows that others have been injured because operable. The state court found the officers could not have seen the of that condition, or intentionally removes a safety feature or device traffic violation and granted Rosado’s motion to quash his arrest from its recreational property.” Lorenc v. Forest Preserve District and suppress evidence. The state ultimately dismissed the case nolle of Will County, 2016 IL App (3d) 150424, ¶ 20. The court found as prosequi on April 14, 2014. insufficient the plaintiff’s allegation that the volunteer had been told not to stand on the paths and the acknowledgment that this action could cause the bicyclists to attempt to avoid a collision and thereby injure themselves. Indeed, the appellate court pointed out that the The court reasoned that Rosado’s defendants took steps to ensure bicyclist safety, namely, placing unexplained failure to file suit within volunteers to notify of upcoming changes in the paths. The appellate court went on to hold that the district was entitled the seven months precluded the ap- to its second motion to dismiss per section 2-619(a)(9) of the Code plicability of equitable tolling. In a foot- of Civil Procedure, 735 ILCS 5/2-619(a)(9) (West 2014), because note, the court suggested that although of the discretionary provisions of the Tort Immunity Act. The Act states that “a public employee serving in a position involving the a lawyer’s error in allowing a statute determination of policy or the exercise of discretion is not liable for of limitations to run is not the type of an injury resulting from his act or omission in determining policy extraordinary circumstances justifying when acting in the exercise of such discretion even though abused.” 745 ILCS 10/2-201 (West 2012). The plaintiff argued that the vol- equitable tolling, the error may give rise unteer’s act of stepping onto the trail and waving his arms did not to liability for malpractice. involve the determination of policy or the exercise of discretion. However, the court found that the volunteer was not specifically told how to notify the bicyclists of the upcoming bridge and, therefore, the monitor was exercising discretion when he went out onto the On April 28, 2015, Rosado brought a section 1983 action against trail. Further, the district was exercising discretion when it placed the arresting officers and the City of Chicago, alleging false arrest, trail monitors at various locations along the path. conspiracy to violate constitutional rights, failure to intervene, viola- In sum, this case helps clarify that the plaintiffs should not be tion of due process rights, and a state-law respondeat superior claim. able to proceed on conclusory allegations that at best only amount District Court Judge Rebecca R. Pallmeyer dismissed the false arrest, to incompetence or inadvertence. Rather, the plaintiffs should be conspiracy, and failure to intervene claims as barred by the statute held to the higher pleading standard required by the Act. of limitations, and dismissed the other two counts on the merits. Rosado appealed the dismissal of the false arrest, conspiracy, and Lorenc v. Forest Preserve District of Will County, 2016 IL App failure to intervene claims only, and the Seventh Circuit affirmed. (3d) 150424. Citing Wallace v. Kato, 549 U.S. 384 (2007), the appellate court reiterated that the statute of limitations for a false arrest claim “begins to run at the time the claimant becomes detained pursuant Seventh Circuit Upholds Dismissal to legal process,” meaning when the claimant is “bound over for of Untimely False Arrest Claim trial.” Rosado v. Gonzalez, 832 F.3d 714, 716 (7th Cir. 2016). The court found that Rosado was bound over for trial on September 8, In September 2012, two Chicago Police Department officers 2012, therefore, the claim he filed in April 2015 was clearly untimely. pulled over a car driven by Mark Rosado for failing to use a turn Rosado tried to save his claim by arguing the doctrines of eq- signal. After stopping the car, the officers claimed they saw a badge, uitable estoppel or equitable tolling applied, but the Seventh Circuit handcuffs, and a handgun in plain view. The officers arrested Rosado rejected these arguments. Equitable estoppel “comes into play if the for unlawful possession of a weapon by a felon and for violating the defendant takes active steps to prevent the plaintiff from suing in armed habitual criminal statute. — Continued on next page

IDC 2016 SURVEY OF LAW | 51 Survey of 2016 Local Government Law Cases (Continued) time, as by promising not to plead the statute of limitations.” Rosado, duties that required repetitive use of his injured arm. Hillmann did 832 F.3d at 716. Equitable tolling may apply “if the defendant has not immediately inform the new supervisor of his physical restric- actively misled the plaintiff, or if the plaintiff has been prevented tions and re-injured his arm. He filed a workers’ compensation claim from asserting his or her rights in some extraordinary way.” Id. at and was eventually given a new work assignment. 717. The Seventh Circuit rejected both arguments here, finding that In 2002, the City faced a serious budget shortfall necessitating by February 2014, when Rosado received the dash cam video, he a citywide RIF. Each department was given a target for reducing its knew the officers lacked probable cause to stop his vehicle, and he workforce, and department heads were directed to identify which had seven more months before the statute of limitations expired. positions to include in the RIF and submit a list to the Office of So, in the absence of some allegation the defendants continued to Budget and Management. John Sullivan, the Managing Deputy obstruct his ability to file his suit, or that seven months was insuf- Commissioner of the Department of Streets and Sanitation, was ficient time to file a complaint, the court concluded he was not the Department’s main contact for its RIF list, but the Streets and entitled to equitable estoppel. Additionally, the court reasoned that Sanitation Commissioner Al Sanchez made the final decision about Rosado’s unexplained failure to file suit within the seven months which departmental positions would be eliminated. Sanchez, the final precluded the applicability of equitable tolling. In a footnote, the authority, reviewed and approved the list and sent it to the Office of court suggested that although a lawyer’s error in allowing a statute Budget and Management. He did not know that Hillmann had filed of limitations to run is not the type of extraordinary circumstances a workers’ compensation claim. justifying equitable tolling, the error may give rise to liability for With respect to the IWCA retaliatory-discharge claim, the Sev- malpractice. enth Circuit held that the City was entitled to judgment as a matter Rosado’s derivative claims for civil conspiracy to commit of law because Hillmann lacked evidence to prove the element of false arrest and failure to intervene during the false arrest were also causation. The court recognized that under Illinois law, a claim for dismissed as untimely, since those claims were squarely founded retaliatory discharge requires – at a minimum – the relevant decision- in the false arrest claim, which was determined to be time-barred. maker knew the employee intended to file or had filed a workers’ compensation claim. In this case, the court found Sanchez made the Rosado v. Gonzalez, 832 F.3d 714 (7th Cir. 2016). final decision about which positions the department would eliminate, and there was no evidence to suggest Sanchez knew Hillmann had filed a workers’ compensation claim. The court further rejected Employee’s Retaliatory-Discharge Hillmann’s effort to impute knowledge onto Sanchez through his Claim Failed Because Final Decision-maker direct supervisors who were aware of his claim and had approved Did Not Know About His Workers’ the RIF list as it went through the chain of command. The court Compensation Claim stated, obiter dictum, “Illinois courts haven’t recognized a cat’s paw theory of liability in this context, and that theory is hard to reconcile For nearly three decades, Robert Hillmann worked for the with the cases holding that the causation element requires evidence City of Chicago in its Department of Streets and Sanitation. In that the relevant decision-maker knew about the plaintiff’s workers’ July 2002, the City eliminated his position in a citywide reduction compensation claim.” Hillmann, 834 F.3d at 794. in force (RIF). Two years later, he sued the City alleging he was targeted for inclusion in the RIF because he asserted rights under Hillmann v. City of Chicago, 834 F.3d 787 (7th Cir. 2016). the Illinois Workers’ Compensation Act (IWCA), 820 ILCS 305/1 (West 2002), and the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12101 (West 2009). Hillmann v. City of Chicago, 834 Illinois Supreme Court Abolishes F.3d 787, 789 (7th Cir. 2016). Public Duty Rule In 1984, Hillmann developed cervical radiculopathy, a work- related injury that caused pain, weakness, limited mobility, and loss In Coleman v. East Joliet Fire Protection District, the Illinois of sensation in his right arm. In 1995, he entered into an accommoda- Supreme Court abolished the long established common law “public tion agreement with the City to allow him to avoid repetitive work duty rule” and its special duty exception. That rule provided that a and assigned him to chief timekeeper in the Bureau of Electricity, a local government entity and its employees owe no duty of care to division of the Streets and Sanitation Department. In 2000, Hillmann individual members of the public to provide government services was temporarily assigned a new supervisor, who gave him additional (including police and fire protection services).

52 | IDC 2016 SURVEY OF LAW was no patient. Neighbors then called 911 and a second ambulance was dispatched. There was a discrepancy with the address and the The court acknowledged that in some second ambulance did not arrive to Coretta’s home until 6:51 p.m., cases, courts have precluded a 41 minutes after the initial call was made. Shortly after the second ambulance arrived, Coretta’s husband arrived and let the responders plaintiff from pursuing a cause of in. Coretta was found unresponsive and later died of cardiac arrest. action for willful and wanton Coretta’s husband filed a wrongful death lawsuit against the district, the county, and the dispatchers. The defendants filed a mo- misconduct because the plaintiff tion for summary judgment, arguing they owed no duty to Coretta could not first establish the government under the public duty rule and, even if they did owe a duty, they were immune from liability under the Emergency Medical Services had a duty to the plaintiff. Systems Act because their conduct was not willful and wanton. The defendants also asserted absolute immunity. The trial court and ap- pellate court ruled in favor of the defendants under the public duty Coretta Coleman and her husband lived in an unincorporated rule. Coleman appealed to the Illinois Supreme Court. area of Will County. In June 2008, all 911 calls from that area The Supreme Court first reviewed the origins of the common were initially routed to the Laraway Public Safety Access Point law “public duty rule” and found the rule was grounded in the (Laraway), a police dispatch center operated by the Will County principle that local government owes a duty to the community as a Sheriff’s Office that handled only police emergencies. The East whole, and not to individual members of the community. The court Joliet Fire Protection District provided fire and ambulance services acknowledged the rule was long-standing and widely accepted. to the area and contracted with the Orland Central Dispatch (OCD) However, the court noted that over time, a number of exceptions for dispatching those services. All medical emergency calls from to the rule had been developed by courts, including the “special Coleman’s area were transferred from Laraway to OCD, whose duty exception.” The court also noted that the Illinois legislature operators then dispatched ambulances operated by the East Joliet had enacted a comprehensive scheme of immunity to protect local Fire Protection District. governments. On June 7, 2008 at 6:10 p.m., Coretta called 911 and was con- The court concluded that “the time has come to abandon the nected to the Will County 911 operator on duty. Coretta claimed she public duty rule and its special duty exception,” and gave three could not breathe and needed an ambulance, and she provided her reasons for abolishing the rule. Coleman v. East Joliet Fire Protec- address. The Will County operator transferred the call to OCD and tion District, 2016 IL 117952, ¶ 52. First, the court held that case hung up as soon as the OCD operator answered without communi- law had been inconsistent in applying the rule and its exceptions. In cating the nature of the call, which the operators are required to do. many cases, courts had skipped the duty analysis altogether and gone The OCD operator asked questions but received no response. He right to addressing the issue of whether the questioned government did not know whether anyone was on the line or if the call dropped, actions were protected by statutory immunity. Second, the court held so he hung up and called Coretta’s number twice but received a the public duty rule was incompatible with the statutory grant of busy signal. Although the OCD operators are trained to call the limited immunity in cases of willful and wanton conduct. The court agency that transferred the 911 call if more information is needed, acknowledged that in some cases, courts have precluded a plaintiff this OCD operator did not. He identified the call as an “unknown from pursuing a cause of action for willful and wanton misconduct medical emergency” and placed the call in line for an ambulance because the plaintiff could not first establish the government had dispatch at 6:13 p.m. a duty to the plaintiff. Third, the court determined the legislature’s An East Joliet Fire Protection District ambulance arrived at enactment of statutory immunity protection had rendered the public Coretta’s residence at 6:19 p.m., but responders were unable to enter duty rule unnecessary. the home because the doors were locked and no one came to the door. The Supreme Court reversed and remanded the case to the cir- Neighbors explained that an elderly couple lived in the home, and cuit court for determination of whether the defendants may be held the woman would be unlikely to answer the phone. The responders liable for willful and wanton conduct as alleged in the complaint. determined that a forced entry could not be made without a police officer’s presence and suggested the neighbors call 911 to suggest a Coleman v. East Joliet Fire Protection District, 2016 IL 117952. forced entry. The responders left after reporting to dispatch that there — Continued on next page

IDC 2016 SURVEY OF LAW | 53 Survey of 2016 Local Government Law Cases (Continued)

Summary Judgment Affirmed for City in was guaranteed at the time that he spoke with the FBI. Since the Negligent Maintenance of Parkway Case Kristofek was fired for speaking out against corruption in the work Premised on Constructive Notice place as a matter of public concern, the Chief of Police was not entitled to qualified immunity. The court reversed and remanded In Barr v. Frausto, the Illinois Appellate Court, Third District, this issue for a new trial because the Kristofek’s speech was con- affirmed summary judgment for the City of Joliet in a personal injury stitutionally protected. premises case in which the plaintiff allegedly sustained injuries after While the Seventh Circuit Court of Appeals reversed on the falling into a grass-covered hole in the City’s parkway. It was undis- First Amendment claim, the reviewing court affirmed the district puted that the City did not have actual notice of the hole. Therefore, court’s dismissal of the plaintiff’s Monell claim. Kristofek argued the issue on appeal was whether the City had constructive notice of that the Village Police Chief had the final policy-making authority the hole. The court held that the plaintiff failed to satisfy his burden to terminate him, and thus alleged that the Village of Orland Hills in showing that the condition, the hole in the parkway, “existed for was liable for the Chief of Police’s constitutional violation. However, such a length of time or was so conspicuous that public authorities, the Seventh Circuit held that the district court properly rejected the by exercising reasonable care and diligence, might have known of Kristofek’s claim under Monell, because the he failed to prove that the condition.” Barr v. Frausto, 2016 IL App (3d) 150014, ¶ 22, the Chief of Police possessed the requisite independent authority citing 745 ILCS 10/3-102(a) (West 2014). to fire officers. Furthermore, the court held that the Village was In this case, all parties testified that they never noticed the hole not liable under a “ratification theory.” Though the Chief of Police prior to the date of the plaintiff’s fall. Furthermore, the plaintiff testi- discussed the plaintiff’s termination with the Village Administrator, fied that he was watching where he was walking immediately prior who consented to his termination, he failed to allege that the Village to his fall and still did not notice the allegedly unsafe condition. The Administrator possessed the final authority to set firing policies. court also highlighted the fact that although the hole was deep, it was Neither the Village Administrator nor the Chief of Police retained not large enough for the City’s co-defendant (homeowner at subject the final authority over termination policy, so that no liability could location) to fit her hand inside it. For these reasons, the court held be imposed on the municipality. that the plaintiff failed to establish a genuine issue of material fact as to the issue of constructive notice. Kristofek v. Village of Orland Hills, 832 F.3d 785 (7th Cir. 2016).

Barr v. Frausto, 2016 IL App (3d) 150014. Civilian Paramedic Did Not Qualify for Benefits Under PSEBA Plaintiff has First Amendment Claim Against the Village Chief of Police In Mitchell v. Village of Barrington, Jodie Mitchell sued the Village of Barrington (the Village) for declaratory judgment and In Kristofek v. Village of Orland Hills, the Seventh Circuit violation of her equal protection rights after the Village denied Court of Appeals reversed the Northern District of Illinois Court’s Mitchell benefits under the Public Safety Employee Benefits Act grant of summary judgment in favor of the Village of Orland Hills’ (PSEBA), 820 ILCS 320/1 (West 2012). The Village employed police chief. Kristofek claimed that the Chief of Police violated Mitchell as a civilian paramedic. She was not a sworn firefighter. his First Amendment right to free speech when the Chief fired Mitchell received less pay than sworn firefighters, and had fewer Kristofek from his job as a police officer in alleged retaliation for duties than sworn firefighters. The Village offered multiple times speaking out about the corruption within the police department. to make Mitchell a sworn firefighter, but she declined. However, to The Seventh Circuit held that the district court erred when it found comply with certain regulations established by the U.S. Department no genuine factual dispute over whether the Chief of Police fired of Labor, the Village required that Mitchell maintain certification as the Kristofek in retaliation for his statements to the FBI, because Firefighter II, complete a program of annual training related to fire the record indicated that the Police Chief knew that he planned rescue and suppression, demonstrate the ability to meet standards on, or had already decided to, contact the FBI. Further, the court required of a rescuer wearing a self-contained breathing apparatus, held that the Chief of Police was not entitled to qualified immunity and continue to meet the job requirements of a paramedic, including because the plaintiff established that the defendant violated his rescuing persons within burning structures where atmospheres were First Amendment right to free speech, and that constitutional right immediately dangerous to life and health.

54 | IDC 2016 SURVEY OF LAW Mitchell responded to a call on January 21, 2007. She slipped Village of Elmwood Park and Midwest Gaming and Entertainment, on ice upon exiting her vehicle and injured her back. She worked LLC v. County of Cook. Both cases arise from the Video Gaming Act, a few shifts thereafter, but then took medical leave. She remained 230 ILCS 40/1 (West 2012) and the Riverboat Gambling Act, 230 on leave until January 28, 2008, when the Village, by letter, termi- ILCS 10/1 (West 2012). The Illinois legislature originally codified nated Mitchell because of her ongoing inability to perform her job the Video Gaming Act in 2009, which legalized video gambling in duties. The Village considered Mitchell to be at maximum medical Illinois (like video poker and video slots). The Video Gaming Act improvement. incorporated by reference the pre-existing Riverboat Gambling Act, On August 31, 2009, Mitchell’s attorney wrote a letter to the which regulated riverboat casinos in Illinois. Village demanding benefits under PSEBA (among other things). The Village denied the request for benefits in November, 2009. On March 24, 2011, Mitchell’s attorney made another demand for benefits, and the Village again denied the benefits. Mitchell’s attorney submitted [T]he Video Gaming Act and its a third demand to the Village on September 2, 2011, for benefits and accompanying regulations set forth included Mitchell’s application. The Village denied benefits again, and on September 10, 2012, Mitchell filed a lawsuit. The circuit the licensing and registration court granted the Village’s motion for summary judgment, finding criteria for video gaming terminals, Mitchell’s claims barred by laches. and video gaming terminal The appellate court on appeal interpreted the definition of manufacturers, distributors, “firefighter,” as that term is used by the PSEBA, and found that Mitchell did not qualify for benefits as a “firefighter” under PSEBA. operators, and technicians. The appellate court observed that her job was not as a full-time fire- The Video Gaming Act requires fighter or sworn firefighter/paramedic, and that the Village offered extensive background checks her the job of sworn firefighter/paramedic and she chose to remain a civilian. The evidence demonstrated that Mitchell was trained and disclosures. in some firefighter duties and was permitted to enter hazardous environments to rescue firefighters, but was not allowed to rescue members of the public. She held a “support role” for firefighters, and was not a “full-time firefighter.” The court also observed that the Among other things, the Video Gaming Act and its accompany- definition of “firefighter” includes “sworn paramedics,” but excludes ing regulations set forth the licensing and registration criteria for “unsworn paramedics.” Since Mitchel was not sworn, she was not video gaming terminals, and video gaming terminal manufacturers, a “firefighter” under PSEBA. distributors, operators, and technicians. The Video Gaming Act The appellate court also rejected Mitchell’s claim that treating requires extensive background checks and disclosures. It limits unsworn civilian paramedics differently than sworn firefighters the places where video gaming terminal operators can place video violated her equal protection rights. The court found that sworn gaming terminals, and those places must have valid written use firefighters are not “similarly situated” to civilian paramedics, and agreements with terminal operators. The Riverboat Gambling Act, there exists a rational basis for the Village to treat civilian paramedics in relevant part, provides, “[l]icensees shall not be subjected to any differently than sworn firefighters. excise tax, license tax, permit tax, privilege tax, occupation tax or excursion tax which is imposed exclusively upon the licensee by the Mitchell v. Village of Barrington, 2016 IL App (1st) 153094. State or any political subdivision thereof, except as provided in this Act.” 230 ILCS 10/21. The Illinois Gaming Board has jurisdiction over, implements, and enforces the Video Gaming Act, the Riverboat Home Rule Units Have the Authority to Gambling Act, and their regulations. Midwest Gaming and Enter- Regulate and Tax Video Gambling tainment, LLC v. County of Cook., 2015 IL App (1st) 142786, ¶ 54. In Accel, a video gaming terminal operator, Accel Entertainment In late 2015, the Illinois Appellate Court, First District, shaped Gaming, LLC, challenged a Village of Elmwood Park Ordinance the power of local home-rule governments to regulate and tax video passed in 2013 pursuant to the Village’s home rule authority. Accel gambling by its decisions in Accel Entertainment Gaming, LLC v. — Continued on next page

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Entertainment Gaming, LLC v. Village of Elmwood Park, 2015 IL Gaming, home rule units have the authority to regulate video gaming, App (1st) 143822. The Village ordinance required video gaming license it, and tax it concurrently with state regulations. terminal operators to obtain licenses from the Village Liquor Com- mission to operate video gaming terminals in the Village. The Village Accel Entertainment Gaming, LLC v. Village of Elmwood Park, 2015 Ordinance was similar in many ways to the Video Gaming Act, and IL App (1st) 143822 and Midwest Gaming and Entertainment, LLC required terminal operators to submit disclosures and background v. County of Cook, 2015 IL App (1st) 142786. information to the Liquor Commission. The Village ordinance also limited where and how many video gaming terminals could oper- ate (among other things). Accel Entertainment, 2015 IL App (1st) City’s Impoundment Ordinance was 143822, ¶¶ 6–9. The Village ordinance also charged a licensing Not an Unlawful Attempt to Raise Revenue fee of $1,000 per terminal per year. Accel argued that the Village ordinance exceeded the Village’s home rule authority because it In McGrath v. City of Kankakee, the Appellate Court of Illinois, was preempted altogether by the Video Gaming Act, the Riverboat Third District, ruled that the City of Kankakee’s impoundment ordi- Gambling Act, and the Illinois Gaming Board’s jurisdiction. Accel nance was not an unconstitutional attempt to raise revenue through further argued that the $1,000 licensing fee was an impermissible the use of police powers. In McGrath, the plaintiff filed an amended tax or license for revenue. class action complaint against the City of Kankakee alleging that Since the Video Gaming Act does not expressly preempt home its impoundment ordinance was unconstitutional because it violated rule authority, the issue before the appellate court was whether video due process and was an unlawful attempt to use police powers to gambling “pertained to local government or affairs,” as is required produce revenue. The relevant section of the Kankakee Municipal to trigger home rule authority under the Illinois Constitution. The Code provided as follows: court considered three factors to determine whether video gambling pertained to local government or affairs: (1) the nature and extent of the problem, (2) the units of government which have the most vital In McGrath, the plaintiff filed an interest in its solution, and (3) the role traditionally played by local and statewide authorities in dealing with it. First, the court found that amended class action complaint the nature and extent of the problem was local, that is, the Village against the City of Kankakee alleging ordinance regulated only within its borders. Second, the court found that Accel had identified no vital state interest jeopardized by the that its impoundment ordinance was Village’s regulations, while the Village had an interest in regulating unconstitutional because it violated gambling and its risk of local criminality, and the community had due process and was an unlawful an interest in geographically relegating video gaming terminals to places far from schools, places of worship, and daycares (to name attempt to use police powers a few). Finally, the court found that while the state has a traditional to produce revenue. role in regulating gambling, video gambling has only been legal since 2009. The factors weighed in favor of finding that video gambling pertains to local government and affairs, and the appellate court Any motor vehicle which is operated by a person who is upheld the Village ordinance and its regulations as constitutional. under the influence of alcohol or drugs; or whose driver’s The appellate court in Accel also found that the $1,000 per license is suspended or revoked, or against whom a terminal per year licensing fee was permissible under the statute warrant has been issued by a circuit court for failing to whether it was a “licensing fee” or a “tax.” For this, the court appear to answer charges that the person was operating a relied on its earlier decision in Midwest Gaming, which upheld motor vehicle under the influence of alcohol or drugs or Cook County’s tax on video gaming terminals, even in light of the for operating a motor vehicle while that person’s license Riverboat Gambling Act’s provision barring “excise tax, license tax, was suspended or revoked shall be subject to seizure and permit tax, privilege tax, occupation tax or excursion tax which is impoundment by the City of Kankakee and its owners shall imposed exclusively upon the licensee by the State or any political be liable to the City for an administrative penalty in the subdivision.” The appellate court found that the language in the amount of FIVE HUNDRED DOLLARS ($500) plus any Riverboat Gambling Act did not specifically preclude home rule units towing or storage fees as hereinafter provided. Kankakee from taxing video gaming terminals. Between Accel and Midwest Municipal Code § 22–85(A) (2002).

56 | IDC 2016 SURVEY OF LAW McGrath v. City of Kankakee, 2016 IL App (3d) 140523, ¶ 3. Disclosure of Information Relating to The ordinance provided for a post-impoundment hearing if the Complaints Against Police Officers Under vehicle’s owner requested one within 24 hours of seizure. Kankakee Illinois’ Freedom of Information Act Municipal Code § 22–85(A)(3) (2002). The hearing must take place within 48 hours after the request is made. In 2008 the City began In Fraternal Order of Police, Chicago Lodge No. 7 v. City of posting signs which put the citizens on notice of the above ordinance. Chicago, the Illinois Appellate Court, First District, held that infor- The courts have repeatedly ruled that impoundment ordinances that mation relating to complaints against Chicago police officers must impose penalties of $500 or more are constitutional because they be disclosed pursuant to the Illinois Freedom of Information Act. In serve the legitimate purpose of deterring criminal activity. For this that case, the defendant-intervenors Chicago Tribune Company, LLC reason, the appellate court in the case at hand found the ordinance (Tribune) and Chicago Sun-Times (Sun-Times), submitted a Free- to be constitutional. dom of Information Act (FOIA) request, pursuant to 5 ILCS 140/1 (West 2012). The FOIA request was directed at the defendants City McGrath v. City of Kankakee, 2016 IL App (3d) 140523. of Chicago (the City) and the Chicago Police Department (CPD). It sought production of a list of police officers who had received at least one complaint, as well as the officer’s date of appointment, No Personal Jurisdiction Over Wisconsin the complaint category, the Complaint Register (CR) number, the Assistant District Attorney in Illinois incident date, the date the complaint was closed, the final finding of the investigation, and any disciplinary action taken. In Jackson v. Village of Grayslake, the plaintiff brought a civil The City and CPD subsequently informed the Fraternal Order rights action under 42 U.S.C. §§ 1983 and 1985 against the Village, of Police, and other organizations who represent police officers that an Assistant District Attorney for Walworth County, Wisconsin (the they intended to release the requested information in response to ADA), and several police officers for false arrest, unlawful search, the FOIA requests. The organizations then filed a verified complaint malicious prosecution, conspiracy, and other claims. Jackson’s com- seeking to enjoin release of the requested information. The plaintiffs plaint arose out of two separate arrests, his apartment being searched argued that the disclosures would run afoul of the Illinois Personnel twice without his consent or warrant, and his interrogation after his Record Review Act (Review Act), 820 ILCS 40/8 (West 2008). The arrest. Jackson also claimed that his second arrest, and the criminal plaintiffs also alleged that the disclosures would violate certain as- charges brought against him in Wisconsin by the ADA, were based pects of the parties’ collective bargaining agreement, which required upon the “fruits of an illegal search” that the ADA should have destruction of records reflecting alleged police misconduct once the known or did know was in violation of his constitutional rights. The records reached a certain age. The circuit court issued various orders, ADA moved to have the claims against her dismissed based upon a which included the granting of a preliminary injunction, enjoining lack of personal jurisdiction and Prosecutorial Immunity. production of the information sought until the plaintiffs’ claims under The ADA argued that even accepting Jackson’s allegations as the Review Act and the Collective Bargaining Agreement could be true, her sole “Illinois contact” was that she initiated a criminal ac- adjudicated on the merits. tion against him in Wisconsin, and in initiating the criminal action The City and the CPD sought an interlocutory appeal with the she used evidence unlawfully seized in Illinois by Illinois police Illinois Appellate Court, First District, pursuant to Illinois Supreme officers. The court found that these contacts were insufficient to Court Rule 307(a)(1) (eff. Feb. 26, 2010). Analyzing the issues, the sustain personal jurisdiction over the ADA in Illinois and that to appellate court noted that public records are presumed to be open do so would “offend traditional notions of fair play and substantial and accessible, and that the FOIA is given a liberal construction in justice.” Jackson v. Village of Grayslake, No. 15 C 2661, 2016 U.S. furtherance of the legislative objective of providing easy public ac- Dist. LEXIS 109373, at *18 (N.D. Ill. Aug. 16, 2016). The ADA cess to governmental information. The court concluded that in light also asserted, arguendo, that if there was personal jurisdiction over of the public policy considerations and the purpose of the FOIA, her that she was protected by absolute prosecutorial immunity. The any award in the pending arbitration proceedings would be unen- court agreed and found that her actions were intimately associated forceable if it circumvented the City’s required compliance with the with the judicial phase of the criminal process and as such were FOIA requests at issue. Because it was undisputed that the CR files covered by absolute prosecutorial immunity. The plaintiff’s claim and related information are subject to disclosure under the FOIA, against the ADA was thus dismissed. the plaintiffs were unable to demonstrate a likelihood of success on the merits of the underlying action, and the circuit court’s entry of Jackson v. Village of Grayslake, No. 15 C 2661, 2016 U.S. Dist. a preliminary injunction was held to be error. LEXIS 109373, at *21 (N.D. Ill. Aug. 16, 2016), dismissing with prejudice at 2016 U.S. Dist. LEXIS 122749 (N.D. Ill. Sep. 9, 2016). — Continued on next page

IDC 2016 SURVEY OF LAW | 57 Survey of 2016 Local Government Law Cases (Continued)

Finally, the appellate court also addressed the plaintiffs’ argu- by providing a remedy for property that is damaged. The Hampton ment regarding section 8 of the Review Act. That section provides court further held that while Arkansas Game & Fish Commission that before releasing information to a third party, an employer “shall was relevant to the determination of whether government-induced ... except when the release is ordered to a party in a legal action temporary flooding is a taking under the Illinois Constitution, that or arbitration, delete disciplinary reports, letters of reprimand, or decision does not conflict with Pratt. The Illinois Supreme Court other records of disciplinary action which are more than 4 years in Pratt did not hold that temporary flooding could never constitute old.” 820 ILCS 40/8 (West 2008). The plaintiffs also argued that a taking, but instead held that the flooding in that specific case did the Review Act allows disclosure of such information only when not amount to a taking. In Hampton, the court held that temporary ordered to a party in legal action or arbitration, that the CR files at floodingcould constitute an actionable takings claim, but remanded issue are personnel files exempt from disclosure under the act, and the case to the circuit court to allow the plaintiffs to amend their that the CR files are disciplinary records exempt from disclosure complaint to allege a sufficient claim for compensation for dam- under the Review Act. The court rejected all these arguments, find- aged property. ing they had either been decided by prior court’s opinions, or that they contravened established public policy. The court vacated the Hampton v. Metropolitan Water Reclamation Dist. of Greater circuit court’s orders granting the plaintiffs’ preliminary injunctions, Chicago, 2016 IL 119861. and found, as a matter of law, that neither the Review Act nor the pendency of the parties’ arbitrations under the CBA interfered with the defendants’ obligation to disclose the requested information.

Fraternal Order of Police, Chicago Lodge No. 7 v. City of Chicago, About the Authors 2016 IL App (1st) 143884.

John M. O’Driscoll is a partner based out of Tressler LLP’s Bolingbrook and Chicago offices. His practice Illinois Supreme Court Analyzes includes representing companies and individuals in Takings Clause business disagreements and providing general counsel serviceso t local governmental bodies such as mu- nicipalities, school districts, library districts and park In Hampton v. Metropolitan Water Reclamation District of districts. Mr. O’Driscoll handles day-to-day government Greater Chicago, a group of property owners in Cook County filed operations issues as well as a wide variety of areas such as business a complaint against the Metropolitan Water Reclamation District of litigation, breaches of contract, construction issues, employment disputes, Greater Chicago (the District). The plaintiffs alleged that rainwater ordinance violations, “sunshine laws” compliance, internet defamation, and complex litigation. He has been selected for inclusion in Illinois Super that flooded their private property constituted a taking under the Lawyers® for 2012 and 2013 and in Illinois Super Lawyers Rising Stars® takings clause in the Illinois Constitution. The plaintiffs maintained from 2008–2011. He has also been recognized as a “Leading Lawyer” by that after the storm, the district closed locks and spillways on certain the Leading Lawyers® Network. He has received the Illinois Association of rivers, discharged excess storm water runoff into surrounding water- Defense Trial Counsel’s President’s Award and also the Meritorious Service Award for his outstanding service as co-chair of the IDC Commercial ways, and pumped storm water into nearby creeks. As a result, the Litigation Committee. He is the Chair of the IDC’s Local Governmental creeks overflowed onto the plaintiffs’ properties and sewers backed Law Committee. John is co-author of the Municipal Litigation chapter of up, causing significant damage. the Illinois Municipal Law Series and co-author of the Park District chap- The circuit court granted the district’s motion to certify a ques- ter of Illinois Special District Series published by the Illinois Institute for tion for interlocutory appeal under Illinois Supreme Court Rule 308 Continuing Legal Education.

(eff. July 1, 2004) to determine whether temporary flooding was Elizabeth K. Barton is an associate with the Chicago considered a taking. Following several amicus curiae briefs filed on office of Ancel Glink Diamond Bush DiCianni & Krafthefer, behalf of the defense, the Illinois Supreme Court granted leave to P.C., where she is a member of the firm’s litigation group. appeal. The Illinois Supreme Court’s analysis turned on whether the Her practice is focused on defending government entities in civil litigation, with a primary emphasis in the defense of United States Supreme Court in the case of Arkansas Game and Fish Section 1983 allegations of police misconduct. Ms. Barton Commission v. U.S., 133 S. Ct. 511 (2012), had overruled the Illinois received her J.D. from The John Marshall Law School Supreme Court’s holding in Pratt v. Rosenfield, 399 Ill. 247 (1948). and her undergraduate degree from the University of Iowa, with honors. The Hampton court noted that the Illinois “takings clause” provides Ms. Barton is a member of the IDC Young Lawyers Division. greater protection for property owners than its federal counterpart

58 | IDC 2016 SURVEY OF LAW Gabriel R. Judd is an associate with HeplerBroom throughout the administrative review process. Mr. Craney obtained the LLC in Chicago where he concentrates his practice in Health Law Certificate from St. Louis University law school, and previously insurance law with an emphasis in first-party coverage clerked with the U.S. Department of Health and Human Services, Office disputes, including insurance fraud and bad faith litiga- of Inspector General. Prior to his legal career, he worked as a statistical tion claims. Mr. Judd also represents municipalities in data analyst with Washington University medical school, and has published negligence, willful and wanton, and civil rights actions, extensively in medical and psychiatric journals. handling various premises liability and police miscon- duct matters. He has civil litigation experience in Illinois state and federal Emily J. Perkins sni a associate with Heyl, Royster, courts.. Mr Judd also has litigation experience handling employment law Voelker & Allen, P.C. in Peoria. She concentrates her matters in both Illinois state and federal courts and before the Illinois practice in the area of employment/labor law and tort Human Rights Commission. Mr. Judd has successfully handled disability litigation, including medical malpractice and profes- sional liability. She received her J.D. from Northern disputes, retaliation claims, racial and sexual orientation discrimination Illinois University College of Law in 2014, M.B.A. from claims, and contact disputes. Bradley University in 2011, and B.S. from Illinois State University in 2008. James W. Ozog is a partner in the Chicago office of Goldberg Segalla LLP. He received his un-dergraduate degree from Northwestern University and law degree from Washington University in 1977. Mr. Ozog concen- trates his practice in product liability defense matters and LOCAL GOVERNMENT law committee commercial litigation. In addition to his Illinois defense practice, he is National Trial Counsel for several product , Chair manufacturers. He has appeared as lead defense counsel in over twenty John M. O’Driscoll states and tried cases to verdict in seven states besides Illinois. He also Tressler LLP, Bolingbrook represents clients on a regular basis in matters before the United States 630-759-0800 Consumer Products Safety Commission. He is a member of the American Bar Association, DRI, Illinois Association of Defense Trial Counsel, IADC, [email protected] and the Propane Gas Defense Association.

Benjamin M. Jacobi is an associate at O’Halloran Kosoff Geitner & Cook, LLC, where he concentrates Elizabeth K. Barton, Vice Chair his practice on municipal defense, employment law, Ancel Glink Diamond Bush DiCianni and general commercial litigation. He has represented a variety of municipal clients in every phase of litigation & Krafthefer, P.C., Chicago and on appeal. He previously served as judicial law clerk 312-604-9183 for Magistrate Judge P. Michael Mahoney in the United States District Court for the Northern District of Illinois. [email protected] He obtained his J.D., with distinction, from the University of Iowa Law School in 2008, where he also served as Managing Editor for MEMBERS the Journal of Corporation Law. Dustin S. Fisher Judge, James, Hoban & Fisher, LLC James D. VanRheeden is an associate of Quinn, Dan T. Corbett O’Halloran Kosoff Geitner & Cook LLC Johnston, Henderson, Pretorius & Cerulo in Peoria. Thomas G. DiCianni Ancel Glink Diamond Bush DiCianni Having joined Quinn Johnston in 2015, Mr. Van- & Krafthefer, P.C. Rheeden is looking to the future with intrigue and Terry A. Fox Flaherty & Youngerman, P.C. passion for personal injury, workers’ compensation Benjamin M. Jacobi O’Halloran Kosoff Geitner & Cook, LLC and business litigation defense. He defends per- sonal injury claims related to auto and transporta- Gabriel R. Judd HeplerBroom LLC tion, construction, premises liability, and product liability. He recently Heather L. Keil O’Hagan LLC joined the IDC Local Government Law Committee. William K. McVisk Johnson & Bell, Ltd. R. Mark Mifflin Giffin, Winning, Cohen & Bodewes, P.C. James L. Craney is the founding partner of Craney James W. Ozog Goldberg Segalla LLP Law Group LLC. His areas of practice include insurance coverage litigation and general litigation with an emphasis Emily J. Perkins Heyl, Royster, Voelker & Allen, P.C. upon trial. Mr. Craney also has extensive experience with Bradley J. Smith Keefe, Campbell, Biery & Associates, LLC employment law, municipal law, environmental litigation, James D. VanRheeden Quinn, Johnston, Henderson, Pretorious, first party insurance litigation and complex business and Cerulo litigation.n I addition, he regularly appears before the John F. Watson Craig & Craig, LLC EEOC and Illinois Department of Human Rights representing employers

IDC 2016 SURVEY OF LAW | 59 Survey of Tort Law Cases

The Northern District Grants in Part, and strict liability under the Moorman doctrine (also known as the and Denies in Part, a Motion to Dismiss economic-loss doctrine). Under the Moorman doctrine plaintiffs by Defendant Electrolux, Complaint are unable to recover tort damages for economic loss for use of the Allegations Based on Defective product. An exception exists to the economic-loss doctrine where Dishwashers “the plaintiff sustains damage, i.e., personal injury or property damage, resulting from a sudden or dangerous occurrence.” Since Illinois consumers brought a putative class action against the plaintiffs alleged damage for loss of property other than to the Electrolux after buying dishwashers that unexpectedly overheated, defective dishwasher, this exception applied to defeat the motion to caused fires, and also flooded. The lawsuit included claims under dismiss based on the economic loss doctrine. The court also rejected Illinois law for breach of implied warranty, strict liability, negligence, arguments by Electrolux that the plaintiffs’ fraud claims were not fraud and various consumer fraud and deceptive practices statutes. plead with particularity. The plaintiffs alleged who (Electrolux, The court granted in part and denied in part a motion by Electrolux Frigidaire and Electrolux dishwashers), what and how (Electrolux to dismiss for failure to state a claim and for failure to plead the knew of the defect, the safety risks and concealed them), and where fraud claims with particularity. The plaintiffs alleged dishwashers and when (there was fraud by at least 2007). These allegations were were purchased through Electrolux dealers for direct home use and sufficient to defeat a motion to dismiss. In favor of Electrolux, the were supposed to last from nine to thirteen years. They claimed court granted its motion to dismiss counts for declaratory judg- the dishwashers were unsafe because the electrical systems over- ment, injunctive relief and unjust enrichment, since these are not heated, caught on fire and melted the tub. These defects resulted in independent causes of action. property damage that included smoke damage, flooding and loss of a house and possessions. The plaintiffs alleged Electrolux received Elward v. Electrolux Home Products, Inc., No. 15 C 9882, 2016 WL complaints about the dishwashers and issued recalls overseas but 5792391 (N.D. Ill. Oct. 4, 2016). not in the United States. The plaintiffs further claimed Electrolux concealed the risks associated with the dishwashers, failed to warn owners to replace the dishwashers and charged owners inspection Plaintiff Fails to Have Sufficient Evidence fees while knowing the dishwashers were not repairable. to Identify the Brand of Snow Tube Electrolux moved to dismiss the count for breach of implied Being Used at Time of Her Accident warranty for economic damages arguing there was lack of vertical Resulting in Summary Judgment in Favor privity as required by the Uniform Commercial Code. The plaintiffs of Snow Tube Manufacturer agreed there was lack of vertical privity but argued Illinois courts had exceptions to this requirement. The court agreed with the plaintiffs The plaintiff purchased a ticket to snow tube on the premises finding they dealt directly with Electrolux dishwasher retailers who of defendant Villa Olivia. Her snow tube stopped while going down were agents, had direct dealings with Electrolux marketing materials, a hill and she was struck by another snow tube rider that was right and also direct dealings with Electrolux through warranty forms. behind her. The plaintiff brought suit against multiple parties that As such, the plaintiffs had sufficient allegations for claims based on included a product liability count against defendant Tube Pro (Tube breach of implied warranty under the direct relationship to privity Pro) for negligence. Tube Pro was one of the companies that sold requirement. The court further held the plaintiffs’ allegations were snow tubes to defendant Villa Olivia. Tube Pro denied in its answer sufficient under a third-party beneficiary exception to privity since to the plaintiff’s complaint that it was the manufacturer of the snow the plaintiffs were remote customers and third-party beneficiaries tube used by the plaintiff. Tube Pro moved for summary judgment of contracts between Electrolux and its dealer-agents. Next the arguing the plaintiff could not prove aprima facie case for product court rejected arguments by Electrolux to bar claims for negligence liability against it when there was insufficient evidence about the

60 | IDC 2016 SURVEY OF LAW identity of the snow tube manufacturer. The snow tube used by the order. Shortly thereafter, the plaintiff filed an “Amended Complaint plaintiff was never inspected, photographed or kept after the accident. for Replevin,” adding counts for breach of fiduciary duty, fraud, The plaintiff testified she did not look at the markings on the tube unfair competition and tortious interference with business relations. and was uncertain who manufactured it. There was also evidence The petition for the rule to show cause was denied by the trial court. defendant Villa Olivia had purchased snow tubes from two different After cross-motions for summary judgment disposed of the breach companies. The trial court found the plaintiff’s evidence that Tube of fiduciary duty and fraud counts, the remaining claims of replevin, Pro was the manufacturer of the snow tube the plaintiff was using unfair competition, and tortious interference with business relations was only circumstantial and granted summary judgment in Tube were heard at a bench trial. At the close of the plaintiff’s case, the Pro’s favor. court entered judgment in favor of the defendant as to the unfair The first district, when affirming summary judgment in favor of competition and tortious interference claims. At the conclusion of Tube Pro, noted the plaintiff has the burden to identify the product the trial, the court found in favor of the plaintiff on its replevin claim manufacturer along with a causal relationship between the injury and ordered the defendant to pay $1,186.08 in compensatory dam- and the product. If the plaintiff relies on circumstantial evidence, the ages and $2,500 in punitive damages, and attorney fees and costs. circumstances must justify an inference of probability and not just a The plaintiff filed a motion to reconsider the amount of punitive mere possibility. Summary judgment was affirmed since it was only damages as inadequate. The court thereafter awarded $100,000 in speculation that Tube Pro was the manufacturer of the snow tube punitive damages. The defendant appealed. used by the plaintiff. The first district turned to the facts showing the The Illinois Appellate Court, Second District, affirmed the judg- snow tube was never inspected, examined or even retrieved after the ment of the trial court but vacated the award of punitive damages plaintiff’s alleged accident and further, the plaintiff did not take any on the plaintiff’s replevin claim. Even though the appellate record photographs of it or even produce an eye witness to her accident. contained no transcripts of the trial and rehearing testimony, the sole The court also found summary judgment should be affirmed since issue was one of statutory interpretation. Therefore, the incomplete the plaintiff failed to cite, as required by Illinois Supreme Court Rule record did not bar review of such a question of law. “Although not 341(h)(7), to any legal authority to support her argument she could explicitly mentioned in a statute, common-law punitive damages prove a prima facie case for product liability without the snow tube. are recoverable in addition to statutory damages where the language in the statute supports such interpretation.” Sensational Four, Inc. Buckel v. Tube Pro Inc., 2016 IL App (1st) 150427-U. v. Tri-Par Die and Mold Corp., 2016 IL App (2d) 150468, ¶ 25. However, interpreting the Replevin Act, 735 ILCS 5/19, the appel- late court found that none of its provisions explicitly or implicitly Punitive Damages Are Not Available provide for recovery of punitive damages, nor do any of the provi- in Replevin Action sions contain language indicating the legislature’s intent to punish willful or wanton conduct or to provide for common-law damages. In Sensational Four, Inc. v. Tri-Par Die and Mold Corp., the plaintiff manufacturer filed a Complaint in Replevin alleging that Sensational Four, Inc. v. Tri-Par Die and Mold Corp., 2016 IL App a defendant, a die and mold company, was wrongfully withholding (2d) 150468. from it two injection molds, including inserts, used for the manu- facture of compartmentalized jars and lids. The plaintiff prayed for an order of replevin and judgment against the defendant for pos- Erroneous Advertisement for Price session of the property, the value of the property not delivered, and of Vehicle Could Not Serve as Basis the damages for detention. The Kane County trial court granted of Binding Contract and Resulted in the plaintiff’s request for replevin and ordered the county sheriff to No Damages Under Consumer Fraud take possession of the property and deliver it to the plaintiff along and Deceptive Business Practices Act with an agreed order that the defendant shall deliver the property to the plaintiff’s truck by a date certain. A few months after the de- In Burkhart v. Wolf Motors of Naperville, Inc., the defendant livery, the plaintiff filed a petition for a rule to show cause against car dealer made a mistake in advertising one of its cars for sale. the defendant’s president for delivering the wrong inserts and for The plaintiff tried to purchase the car at the advertised price. After destroying the original inserts that were the subject of the replevin — Continued on next page

IDC 2016 SURVEY OF LAW | 61 Survey of 2016 Tort Law Cases (Continued) the defendant refused to sell at the advertised price on the ground The Act provides remedies for purely economic injuries. that the advertised price was a clerical mistake (a $20,000 discrep- Actual damages must be calculable and ‘measured by the ancy), the plaintiff filed a complaint alleging the defendant’s actions plaintiff’s loss.’ The failure to allege specific, actual dam- constituted breach of contract and consumer fraud and injured the ages precludes a claim brought under the Act. The purpose plaintiff when the defendant advertised the vehicle at a price for of awarding damages to a consumer-fraud victim is not which it did not intend to sell. to punish the defendant or bestow a windfall upon the The defendant filed a motion for summary judgment, arguing plaintiff, but rather to make the plaintiff whole. that the advertisement did not constitute an offer that could be accepted so as to form a contract. The defendant further argued Burkhart, 2016 IL App (2d) 151053, ¶ 22. that its actions did not amount to consumer fraud because (1) it did not commit a deceptive act or practice, (2) it did not intend for the The appellate court concluded that the plaintiff was in the same plaintiff to rely on any deceptive act or practice, and (3) the plaintiff position she was in before she saw the advertisement and that the did not incur any actual damages. The plaintiff filed a cross-motion alleged damages she sought (the difference between the price at for summary judgment, arguing she was entitled to summary judg- which the car was advertised and the appraised value of the car) ment because (1) the defendant admitted that it refused to sell the would constitute an improper windfall. As a result, the plaintiff vehicle to the plaintiff as advertised, and (2) the defendant admit- suffered no damages. ted advertising a vehicle for sale without an intention of selling the vehicle as advertised. The DuPage County circuit court granted the Burkhart v. Wolf Motors of Naperville, Inc., 2016 IL App (2d) defendant’s motion for summary judgment and denied the plaintiff’s 151053. motion. The plaintiff appealed. The Illinois Appellate Court, Second District, affirmed the judgment of the circuit court. On appeal, the plaintiff insisted she had a contract with the defendant or that, al- Plaintiffs Allowed to Proceed with ternatively, the defendant’s actions constituted consumer fraud. The Product Liability Claims Against Goof Off appellate court found that an erroneous advertisement could not in Manufacturer After Sustaining itself serve as the basis of a binding contract between the parties. Severe Burn Injuries

The advertisement did not reflect a price for which the The plaintiff Juan Suarez was severely burned from a fire that defendant ever intended to sell the vehicle. As such, the started while he was using Goof Off to remove paint from his base- advertisement did not constitute an offer, and the plain- ment floor. He and his wife (Suarez) sued Goof Off manufacturer tiff’s ‘acceptance’ of that advertisement did not establish W.M. Barr & Company (W.M. Barr) alleging in part theories of a contract … as there was never a meeting of the minds failure to warn and defective design. The trial court granted summary as to the price the plaintiff was willing to pay for the car judgment in favor of W.M. Barr which was affirmed in part, and and the price the defendant was willing to accept, there reversed in part, by the U.S. Court of Appeals for the Seventh Circuit. was no contract between the parties. The primary ingredient in W.M. Barr’s Goof Off is acetone which is highly flammable and evaporates quickly at room tempera- Burkhart v. Wolf Motors of Naperville, Inc., 2016 IL App (2d) ture. The can purchased by Suarez had warnings, written in English 151053, ¶¶ 17,18. and Spanish, on the side of it to let purchasers know about potential fire hazards. Suarez testified he read most of the warnings but was The plaintiff’s second contention was that the defendant not clear whether or not he turned off the pilot lights connected to committed consumer fraud when it advertised the vehicle without two water heaters and a furnace located in the basement when us- intending to sell it at the advertised price, maintaining that it was ing the Goof Off. The Seventh Circuit agreed with the parties that irrelevant whether the advertised price was correct. The appellate Goof Off is a hazardous substance and as such W.M. Bar is required court found that, although the record contained some of the elements to comply with the Federal Hazardous Substances Act (the Act) of a cause of action for consumer fraud, there was no evidence that labeling requirements. The Act requires a label that conspicuously the plaintiff suffered any actual damages. displays an affirmative statement of the principal hazard or hazards such as “Flammable” along with precautionary measures describing

62 | IDC 2016 SURVEY OF LAW the actions to be followed or avoided. The Act also preempts any Off. The court also agreed summary judgment should not be granted state law claims that the product label should include warnings not since there was a genuine factual dispute about whether Goof Off required by the Act and its regulations. The court found W.M. Barr’s was negligently designed. There was evidence of an unreasonably label, stating “Danger! Extremely flammable. Keep away from heat, dangerous condition and also evidence W.M. Barr failed to properly sparks, flame and all other sources of ignition. Vapors may cause test its product. The Seventh Circuit noted the Illinois Supreme flash fire or ignite explosively,” met the Act’s requirements. Next, the Court has found that when the risk-utility test favors the plaintiffs, court analyzed whether there was a genuine issue of material fact as it supports a finding that defendants’ conduct was unreasonable. to consumer expectations under the Illinois’ Consumer-Expectation Test and Risk-Utility Test. For an Illinois strict products liability Suarez v. W.M. Barr & Co., Inc., 842 F.3d 513 (7th Cir. 2016). claim a plaintiff must prove: (a) the product had an unreasonably dangerous condition; (b) the condition existed when the product left the manufacturer’s control; and (c) the condition injured the First District Affirms Impact Requirement plaintiff. For an alleged design defect, the unreasonably dangerous for Direct Victims to Prevail on Negligent nature of the product can be proved by the consumer expectation Infliction of Emotional Distress Claim test which finds liability if “the product failed to perform as safely as an ordinary consumer would expect when used in an intended or In Schweihs v. Chase Home Finance, LLC, the First District of reasonably foreseeable manner.” the Illinois Appellate Court reconciled potentially conflicting Illinois The plaintiffs argued that an ordinary consumer would not Supreme Court cases, clarifying that to state a claim for the negligent expect that following the product’s instructions (i.e. agitating Goof infliction of emotional distress in Illinois, a direct victim must allege Off with a brush), would cause vapors to ignite. The plaintiff’s expert “some physical contact between her and defendants.” Schweihs v. testified a static spark could have been created when the broom being Chase Home Finance, LLC, 2015 IL App (1st) 140683, ¶ 22. used by the plaintiff brushed against his clothes or surroundings. The In this case, Melinda Schweihs, filed suit alleging, inter alia, plaintiffs also retained a fire investigator who testified a spark was negligent and intentional infliction of emotional distress against her the likeliest source of the ignition. The court rejected W.M. Barr’s mortgagee, preservation services company, and two subcontractors. arguments that the plaintiff was not acting like an ordinary consumer Schweihs obtained a mortgage for a home in Northbrook, Illinois by using Goof Off near a pilot light since there was inconclusive from Chase Home Financial in 1997; however, she defaulted on evidence the pilot lights were turned on, and as such, there was a this mortgage in 2007. After a judgment of foreclosure was entered disputed material fact about the source of the ignition. It was also against Schweihs in May 2010, she was permitted to remain on the found there were disputed material facts about whether or not the property through at least the end of her redemption period in August basement was an area where vapors could accumulate since the 2010. See Chase Home Finance, LLC v. Schweihs, No. 07 CH 35360 plaintiff testified he opened basement doors and a window leading (Cir. Ct. Cook County, Ill.). to the outside when using the Goof Off. During this time period, Safeguard was hired by Chase to pro- Illinois courts consider in part the following when applying the vide preservation services to the foreclosed home. These preserva- risk-utility test: (a) the product’s utility to the public; (b) the likeli- tion services included inspections which were conducted through hood and probability of foreseeable injury to consumers; (c) any local vendors and subcontractors. Here, subcontractors Gonsalez instructions and warnings accompanying the product; (d) the nature and Centeno were responsible for carrying out an “initial secure” and strength of consumer expectations; (e) the manufacturer’s abil- work order Safeguard placed for the home. As a prerequisite to ity to eliminate unsafe characteristics without excessively affecting executing the “initial secure,” Gonsalez and Centeno were required usefulness or price; (f) the availability and feasibility of alternative to determine the vacancy status of the property. designs; and (g) conformity with any applicable industry standards In June 2010, Gonsalez and Centeno spent 45-90 minutes at- and governmental regulations. Here it was found W.M. Barr’s Goof tempting to determine the vacancy status of the home. Upon visual Off product failed under the risk utility test since there was expert inspection, they found the grounds to be unkempt with uncut grass testimony that using the product as instructed could pose a serious and overgrown trees and the interior to be strewn with substantial risk of harm. There was also a disputed issue of material fact whether debris and apparent garbage. They also determined that the utilities or not water based Goof Off, which is not extremely flammable, was had been turned off. a feasible alternative to W.M. Barr’s flammable acetone based Goof — Continued on next page

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However, a vehicle was parked in the home’s driveway and con- Deliberate Encounter Exception to the versations with neighbors revealed that the owner “comes and goes.” Open and Obvious Doctrine Applies Where Schweihs, 2015 IL App (1st) 140683, ¶ 9. Based on this information, Delivery Driver Worked Quickly Gonsalez and Centeno attempted to enter the home. They claim to have knocked on the front door, then due to substantial debris and In Atchley v. University of Chicago Medical Center, a delivery boxes stacked against the door, had to remove the door and crawl into truck driver fell and fractured his ankle while delivering pallets of the home. Once inside, they encountered Schweihs. She admitted beverages to the University of Chicago Medical Center (UCMC). to having seen Gonsalez and Centeno on the property, heard them The driver fell when he attempted to use a dolly to release a mo- knocking on the front door, and believed them to be potential buyers torized pallet jack that had become stuck between the delivery as she was trying to sell her home; she did not answer the door or truck and a broken dock leveler. The driver, Steven Atchley, filed otherwise intercept them as she was on the telephone. While there a negligence and premises liability cause of action against UCMC. are disputes as to the tone of the conversation, once confronted After completion of discovery, UCMC moved for summary judg- Gonsalez and Centeno informed Schweihs that they were there to ment, contending that it did not owe Atchley any duty because the winterize her home in connection with the foreclosures and that she broken dock leveler was an open and obvious condition. UCMC also needed to come outside. She opted instead to call her foreclosure asserted that the broken dock leveler was not the proximate cause of lawyer and the police. Atchley’s injuries. Atchley responded, maintaining that the broken After the incident, she sought medical treatment at a local hos- dock leveler was not an open and obvious condition, and in the alternative, that the deliberate encounter exception to the open and pital “because she ‘didn’t feel right.’” Id. ¶ 12. She alleged that she obvious doctrine was applicable. Atchley also claimed that UCMC’s became afraid that she might be attacked any time she was in her negligence proximately caused his injuries. home, which necessitated psychological treatment and medications The circuit court granted summary judgment to UCMC, conclud- for her resulting issues with sleep, anxiety, and depression. Further, ing that the danger was open and obvious, the deliberate encounter Schweihs alleged that she was terminated from her employment exception did not apply, UCMC therefore owed no duty to Atchley after her request was denied for temporary leave due to the incident. and the broken dock leveler was not a proximate cause of Atchley’s As a result, Schweihs brought a claim against all defendants injuries. The Illinois Appellate Court for the First District then reversed for the negligent infliction of emotional distress. The trial court the circuit court’s granting of summary judgment in favor of UCMC. dismissed her claim for failure to state a claim under 735 ILCS The first district did not find that the open and obvious doctrine 5/2-615. The plaintiff appealed this dismissal based on the Illinois necessarily applied to the broken dock leveler at issue in this cause Supreme Court’s rulings in Corgan v. Muehling, 143 Ill. 2d 296 of action. While a reasonable person would observe that the leveler (1991) and Pasquale v. Speed Products Engineering, 166 Ill. 2d was broken, that same person may not identify the dangers pre- 337 (1995). She argued that these cases further expanded the type sented by that broken leveler. “Steven’s [Atchley’s] belief that [the of potentially successful claimants that the Illinois Supreme Court broken leveler] would not pose a problem to unloading goods with had already begun to expand in Rickey v. Chicago Transit Authority, a pallet jack is not inherently unreasonable.” Atchley v. University 98 Ill. 2d 546 (1983). Schweihs argued that where Rickey abolished of Chicago Medical Center, 2016 IL App (1st) 152481, ¶ 36. The the impact rule for bystanders, requiring instead that a bystander be first district also found that the deliberate encounter exception was in such close proximity to an accident which injured a direct victim applicable to this cause of action. Testimony indicated that deliver- that there was a high risk of injury to the bystander him- or herself, ies made to UCMC were time-sensitive, and that delivery drivers Corgan and Pasquale abolished the impact rule for direct victims would attempt to promptly resolve any hindrances preventing their as well. See Corgan, 143 Ill. 2d 296; Pasquale, 166 Ill. 2d 337. The deliveries. As such, it was foreseeable to UCMC that Atchley, in first district rejected this argument based on a more careful read- his role as an employee, would attempt to work around the broken ing of these cases reasoning that Corgan and Pasquale addressed dock leveler without delay. The first district also concluded that a bystander plaintiffs and were therefore affirmingRickey , and to the genuine issue of material fact existed regarding proximate cause. extent there was any discrepancy, the discrepancy was mere dicta They discerned that UCMC’s actions, or inactions, with respect to and not binding. Schweihs, 2015 IL App (1st) 140683, ¶¶ 23-25. the broken dock leveler, were “material and substantial” factors in causing Atchley’s injuries. Schweihs v. Chase Home Finance, LLC, 2015 IL App (1st) 140683, Atchley v. University of Chicago Medical Center, 2016 IL App affirmed by 2016 IL, 20041. (1st) 152481.

64 | IDC 2016 SURVEY OF LAW Distraction Exception to the Open and Product Manufacturer Does Not Owe a Duty Obvious Doctrine May Apply Where a for “Take-Home” Asbestos Exposures Customer is Browsing Applying Illinois law, the District Court, Northern District of In Bulduk v. Walgreen Co., a customer, Saime Sebnem Bulduk, Illinois, granted MW Custom Papers’ motion to dismiss in Neumann brought a cause of action against a drug store alleging negligence, v. Borg-Warner Morse Tec LLC, holding that MW Custom Papers, negligent spoliation of evidence and res ipsa loquitur. Bulduk alleged did not owe a duty to Neumann as a matter of public policy. Neumann that she was injured in a Walgreen store when a cleaning machine had originally brought an action in Illinois state court alleging that that had been placed in the middle of the cosmetics aisle fell on her her son worked with asbestos-containing products of MW Custom as she was browsing items. Bulduk also alleged that Walgreen did Papers, and that consequently, she was exposed to asbestos fibers not save all surveillance videos from the day of the incident. carried home by her son. She further claimed that these exposures The circuit court granted the store’s motion for summary led to her development of malignant mesothelioma. Under Illinois judgment. The Illinois Appellate Court for the first district affirmed law the duty to protect others is limited by four considerations: (1) in part and reversed in part. The Supreme Court of Illinois then the reasonable foreseeability of the injury; (2) the likelihood of the denied the store’s petition for appeal, but vacated the first district’s injury; (3) the magnitude of the burden of guarding against the in- initial decision, directing it to reconsider its ruling with respect to jury; and (4) the consequences of placing that burden on defendant. the opinion in Bruns v. City of Centralia, 2014 IL 116998. Upon Having found the foreseeability factor satisfied, and the likelihood reconsideration, the first district found that the Bruns opinion was of injury unchallenged, the court focused on the two remaining distinguishable from the facts in Bulduk. In Bruns, a woman tripped policy-oriented factors. The court pointed out that MW Custom on a crack in a sidewalk while she was looking at the door and steps Papers did not employ either Neumann or her son, and according leading to her destination. to MW Custom Papers, it had no feasible means of communicating In both Bruns and Bulduk, the plaintiffs noticed the potential any warnings or instructions to Neumann. MW Custom Papers also risks prior to those risks causing their respective alleged injuries. The argued that placing this burden on it would be poor public policy as first district differentiatesBulduk from Bruns by finding that Bulduk well as unfair, as it would fault the company for failing to do what was actively browsing the store’s shelves rather than simply looking it could not have done, and would transform manufacturers into de in another direction. It was reasonably foreseeable that a customer facto insurers to a virtually unlimited population of individuals. The would be distracted while browsing. The evidence in Bulduk also court held that MW Custom Papers did not owe a duty to Neumann, supported the contention that Walgreen knew that the cleaning in light of the magnitude of the burden of protecting her and the machines created a potential danger to customers. The first district ramifications of imposing that burden on MW Custom Papers. concluded that a question of fact remained as to whether brows- ing a store’s shelves constitutes a distraction, thereby precluding Neumann v. Borg-Warner Morse Tec LLC, 168 F. Supp. 3d 1116 summary judgment in favor of Walgreen with respect to Bulduk’s (N.D.Ill. 2016). negligence claim. As to Bulduk’s claim of negligent spoliation, the first district found that granting summary judgment in favor of Walgreen was Physical Injury Does Not Equal Physical proper, where Walgreen reviewed the surveillance videos from the Harm in Illinois Asbestos Exposure Case store on the date of the incident, and preserved any surveillance videos that depicted the Bulduk, rather than preserving all surveil- The Illinois Appellate Court, Fourth District, reversed the lance videos. Ultimately, the only surveillance videos of Bulduk McLean County trial court in Sondag v. Pneumo Abex Corpora- showed her entering and then exiting the store. tion, holding that Joseph Sondag suffered no “physical harm” and that the plaintiffs had therefore failed to establish a key element of Bulduk v. Walgreen Co., 2015 IL App (1st) 150166-B. their cause of action. Joseph and Phyllis Sondag originally alleged that Joseph Sondag’s use of asbestos-containing products manufac- tured by Tremco, Inc. during his career as a plasterer caused him to develop pleural plaques and interstitial fibrosis. Sondag’s treating

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IDC 2016 SURVEY OF LAW | 65 Survey of 2016 Tort Law Cases (Continued) physician testified that Sondag complained of dizziness, sweating than a mere change or alteration to the structure of one’s body and an inner ear disturbance in 2007. Sondag never complained of (emphasis added). shortness of breath or chest pain, and his lungs were clear, with no Notably, the court opined that had the Sondags alleged battery wheezing or restriction. A pulmonary function test showed results against Tremco, Sondag would have justifiably been found to have within normal limits, but an X-ray and CT scan revealed pleural suffered “bodily harm,” defined in Section 15 of the Restatement plaques and interstitial fibrosis, and Sondag was diagnosed with (Second) of Torts as contact that alters the victim’s body in any asbestosis. At trial, Sondag’s condition was unchanged. He had no way—even if the alteration is physically beneficial. However, the restrictive lung disease, no pulmonary symptoms, and no respira- complaint in the instant case alleged products liability, not battery, tory distress or limitation. The pleural plaques had not progressed and the appellate court therefore found the bodily harm definition in several years. Tremco moved for a directed verdict, which the to be irrelevant. trial court denied. The jury returned a verdict in Sondag’s favor and The appellate court thus concluded that because Sondag’s awarded damages at trial. pleural plaques and interstitial fibrosis caused him no physi - cally impairing loss or detriment, the Sondags had presented no evidence of “physical harm,” an essential element of their cause The word “injury” denotes “the of action. The appellate court therefore reversed the trial court and held that Tremco’s motion for a directed verdict should have invasion of any legally protected been granted. interest of another,” while the word “harm” denotes “the existence of loss Sondag v. Pneumo Abex Corporation, 2016 IL App (4th) 140918. or detriment in fact of any kind to a person resulting from any cause,” Restaurant Owes Heightened Duty When It and “physical harm” is defined as Creates Environment Likely to Cause Harm “the physical impairment of the In Libolt v. Wiener Circle, Inc., an unidentified man ran into human body, or of land or chattels.” the plaintiff, knocking her to the ground and causing injuries. The plaintiff and several friends were at a hotdog stand called Wiener Circle. Wiener Circle has a reputation as a rowdy, late night place, frequented by intoxicated patrons. The staff at Wiener Circle engages Tremco appealed and argued that absent any clinical symptoms, in rowdy, verbal sparring with customers which was described as physical changes to the lungs as a result of inhalation of asbestos Wiener Circle’s “schtick.” The interaction between the staff and dust do not afford a cause of action for products liability. The court the unidentified man escalated and the man repeatedly approached noted that Section 388 of the Restatement (Second) of Torts gov- the service counter and yelled at the staff. The staff responded by erns products-liability actions premised on negligence and states in threatening to pepper spray the man and one staff member swatted pertinent part that one who supplies a chattel for another to use is at him with a large spoon or brush. subject to liability for physical harm caused by the use of the chattel. The plaintiff testified that she did not know if it was the uniden- (emphasis added) Section 7 of the Restatement (Second) of Torts tified man who bumped into her. Months after the occurrence, one dictates that “injury” and “harm” are distinct, accounting for com- of the plaintiff’s friends, Robert Lady, told her that the unidentified mon law recognition of a cause of action for conduct that invades man had pushed or spilled his hotdog, so Lady pushed the man, who or “injures” a legally protected interest, but causes no harm, such as then bumped into the plaintiff. Lady testified that as he was facing an assault. The word “injury” denotes “the invasion of any legally the service counter, the man reached over Lady’s shoulder and Lady protected interest of another,” while the word “harm” denotes “the then pushed him away. existence of loss or detriment in fact of any kind to a person resulting The trial court granted summary judgment in favor of Wiener from any cause,” and “physical harm” is defined as “the physical Circle and the plaintiff appealed. The plaintiff argued that because impairment of the human body, or of land or chattels.” Comment b Wiener Circle created the “hostile, volatile environment” it owed the to Section 7 clarifies that “harm” requires aloss or detriment; more plaintiff a heightened duty to protect her from any dangers arising

66 | IDC 2016 SURVEY OF LAW from that environment. The appellate court agreed with the plaintiff Tenant Not Liable Where Landlord Retained and reversed the trial court. Duty to Repair and Maintain the Premises The appellate court considered four factors which determine whether a duty is owed. It found that injury was foreseeable and In Hanna v. Creative Designers, Inc., the plaintiff was a hair likely and that imposing a burden on Wiener Circle to protect the stylist working as an independent contractor at a beauty salon op- plaintiff and the consequences of that burden were minimal. (It erated by Creative Designers, Inc. The plaintiff began to close her could hire security.) work station after being notified that she was being terminated from The appellate court pointed out that it was not holding that all her job. While doing so, a flip-top counter fixture fell, striking the restaurants have a heightened duty to customers, only those creating plaintiff on her head, neck and shoulder. and maintaining an environment that poses an unreasonably high Creative Designers, Inc. leased the premises from Luther Vil- likelihood of injury. lage. Luther Village installed all of the fixtures and, under the terms Wiener Circle also argued that the plaintiff could not establish of the lease, was responsible for repairs to the fixtures, including proximate cause because it could not be determined whether the repairs made necessary by the negligence of Creative Designers, Inc. verbal exchanges between the staff and the unidentified man caused In response to the plaintiff’s lawsuit, Creative Designers, Inc. him to bump Lady which caused Lady to push the man into the filed a motion for summary judgment. It argued that Luther Village plaintiff. The court held that proximate cause was not appropriate was responsible for all repairs and maintenance of the fixtures in the for summary judgment when material facts were in dispute. salon and that there was no notice of any defect in the countertop. The trial court granted the motion. Libolt v. Wiener Circle, Inc., 2016 IL App (1st) 150118. On appeal, the plaintiff argued that Creative Designers, Inc. was in control and possession of the premises and was required, by the lease, to “maintain the Premises in as good condition as when Evidentiary Foundation Required for Tenant took possession.” The appellate court was not persuaded Adjusted “Unpaid” Portion of Medical Bills by the plaintiff’s argument and affirmed summary judgment for Creative Designers, Inc. The lease clearly made Luther Village The plaintiff sustained injuries in a motor vehicle accident with solely responsible for the maintenance and repair of the fixtures in defendant and, at trial, offered medical bills into evidence. The plaintiff the salon. The appellate court also noted that even if it found a duty sought to recover the total amount “billed” and not just the “paid” owned by Creative Designers, Inc., there was no evidence that it amounts. A number of the bills showed adjustments to the amounts had notice of any defective condition. The plaintiff testified that she due, but did not indicate payment. The defendant objected to those had raised and lowered the countertop six or seven times that day bills on the grounds that the plaintiff did not lay a proper foundation for without a problem. the bills since no medical provider testified that the adjusted portions of the bills were reasonable and necessary. The trial court allowed Hanna v. Creative Designers, Inc., 2016 IL App (1st) 143727. the bills into evidence, including the unpaid, adjusted portions, and the jury awarded the total billed amount in damages. The defendant’s post-trial motion for remittitur was denied and the defendant appealed. Dead-Man’s Act Bars Plaintiff’s Testimony The appellate court held that the admission of the “satisfied,” in Rear-End Auto Case but unpaid bills was error. A “satisfied” medical bill does not have In Peacock v. Waldeck, the plaintiff sued defendant for injuries the same evidentiary status as a paid medical bill. The court noted sustained in a rear-end motor vehicle accident. The defendant died that in Wills v. Foster, 229 Ill. 2d 393 (2008), the defendant stipulated before the suit was resolved. Her appointed representative moved to the reasonableness of the “billed” amounts and did not object to for summary judgment on the grounds that the Dead-Man’s Act, the lack of a proper foundation. 735 ILCS 5/8-201, barred testimony that was needed to establish The appellate court ordered a remittitur of the written-off or defendant’s negligence. The trial court granted the defendant’s mo- adjusted portions of the bills, or, in the event the plaintiff did not tion and the plaintiff appealed. consent to the remittitur, a new trial on the issue of damages. The appellate court distinguished two prior cases, Rerack v. Lally, 241 Ill. App. 3d 692 (1st Dist. 1992) and Burns v. Grezeka, 155 Klesowitch v. Smith, 2016 IL App (1st) 150414. — Continued on next page

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Ill. App. 3d 294 (2d Dist. 1987) in which the Dead-Man’s Act was speed. (In Watkins, witnesses estimated the speed of defendant’s not applied to bar the plaintiffs’ testimony in rear-end motor vehicle truck to be between 20 and 35 miles per hour, but the truck left 124 accidents. The appellate court focused on the deceased defendant’s feet of skid marks. The supreme court held that the skid marks raised answer to the plaintiff’s allegations. The defendant answered that she questions as to the accuracy of the eyewitnesses’ estimates of speed did not have sufficient knowledge and could not admit nor deny the which precluded summary judgment for defendant.) plaintiff’s allegation that the plaintiff was stopped at a stoplight at the The appellate court compared the sheriff’s reconstructionist’s time of the accident. The plaintiff argued that this response allowed findings, the witnesses’ testimony and defendant’s testimony and an inference that the plaintiff was stopped before the collision. The found all of the evidence to be consistent. For example, 255 feet of court believed the evidentiary inference could not be made since the skid marks were consistent with testimony that it would take 500 defendant did not admit the plaintiff was stopped. The defendant’s feet to stop the truck at 55 miles per hour and 55 feet of pre-collision answer left open the possibility that the plaintiff stopped suddenly skid marks were consistent with the defendant’s reported speed (81 or in an unsafe manner, so the trial court’s application of the Dead- feet per second) and witnesses’ testimony that the plaintiff turned Man’s Act was appropriate and affirmed. (The court suggested that two seconds before impact. the plaintiff should have argued that the Dead-Man’s Act does not The appellate court found no evidence that the defendant was apply to matters not within the knowledge of a decedent since its speeding and no evidence that the flat topography at the intersection purpose is to bar testimony that the decedent could have refuted.) or weather conditions warranted any greater care by the defendant. To the contrary, the appellate court found that the evidence of the Peacock v. Waldeck, 2016 IL App (2d) 151043. decedent’s conduct established that the defendant was faced with an unavoidable accident and was not the proximate cause of the collision. Summary judgment for defendant was affirmed. Unavoidable Accident Evidence of Skid Marks Insufficient to Create In re Estate of Case v. Hanneman, 2016 IL App (2d) 151147. Question of Fact

The plaintiff’s decedent was killed when she made a left-hand Abuse of Discretion to Grant Summary turn in front of the defendant’s semi-tractor and trailer. Defendant Judgment While Interlocutory Appeal testified that he was traveling at 55 miles per hour as he approached from Discovery Order is Pending Disputed the intersection where the accident occurred and that it would take Discovery Could Establish Prior Notice of 500 feet to stop the truck at that speed. He was 50 feet from the Danger to Concert Attendees intersection when the decedent’s vehicle entered the intersection. The collision occurred in defendant’s lane of traffic. In Jones v. Live Nation Entertainment, Inc., the plaintiff was A sheriff’s accident reconstructionist observed tire marks from attending a Kanye West/Jay Z concert at the United Center. Live the decedent’s car which indicated she had turned left, quickly and Nation was the promoter of the concert and rented the United Center abruptly. There were 55 feet of pre-collision marks from the defen- for the concert’s venue. The performers encouraged the attendees to dant’s truck and the vehicles traveled 200 feet after the collision. leave their seats and come down to the stage. The plaintiff intended Witnesses traveling behind the decedent’s vehicle testified that to leave, but was caught in the crowd surge and knocked down some the decedent did not stop and made an abrupt turn in front of the steps resulting in injuries. defendant two seconds (160 feet) before the collision. During the course of the litigation that followed, the plaintiff The defendant moved for summary judgment. The trial court served Live Nation with interrogatories seeking information about granted the motion finding that the accident was unavoidable, that other lawsuits and claims arising from events during other per- the defendant’s conduct was not the proximate cause of the accident formances. Live Nation objected, requested an order of friendly and that the evidence would not support a jury finding the defendant contempt, and appealed the trial court’s order which compelled to be 50% or more at fault. Live Nation to answer the interrogatories. While the appeal from the The plaintiff appealed and argued, based onWatkins v. Schmitt, contempt order was pending, Live Nation filed a motion for summary 172 Ill. 2d 193 (1996), that the skid marks left by the defendant’s judgment. It argued that it did not owe a duty to the plaintiff. The truck were enough to raise a question of fact as to the defendant’s plaintiff responded claiming she was an invitee and Live Nation was

68 | IDC 2016 SURVEY OF LAW the possessor of the premises and therefore owed a duty to protect Nation-promoted event, which featured two artists that Live Na- her from unreasonable risks. The trial court granted Live Nation’s tion placed in performance, had a relationship with defendent Live motion, finding that it had no control over the performers and was Nation. The rental agreement has no bearing on plaintiff’s right to not in possession of the premises. bring suit against defendant Live Nation for her injuries.” Jones v. The plaintiff filed a motion for reconsideration arguing, in part, Live Nation Entertainment, 2016 IL App (1st) 152923, ¶ 40. that the trial court should delay ruling until the appellate court de- Because the rental agreement was not determinative of Live cided whether Live Nation should answer the interrogatories. While Nation’s duty, the appellate court focused on whether Live Nation the motion for reconsideration was pending, the appellate court, was aware of the “crowd surge” taking place at other concerts. in a Rule 23 order, ordered Live Nation to answer the plaintiff’s “[E]ven if defendant Live Nation was not in possession of the area interrogatories. The plaintiff sought to supplement her motion for in which plaintiff sustained injuries, and not in control of the per- reconsideration with a copy of the Rule 23 order, but her motion former’s interactions with the crowd, the question remains whether to supplement was denied because a Rule 23 order was not to be defendant Live Nation was on notice that this type of ‘crowd surge’ cited or used as precedent. The trial court also denied the plaintiff’s and, in turn, plaintiff’s type of injury, were foreseeable.” Jones, motion for reconsideration and the plaintiff appealed. 2016 IL App (1st) 152923, ¶ 43. This issue could not be resolved without Live Nation’s answers to interrogatories. If those answers indicated that Live Nation had notice of other similar occurrences, the plaintiff’s accident may have been foreseeable and Live Nation The gist of Live Nation’s argument may have owed a duty to the plaintiff. The trial court’s ruling was was that under its rental agreement reversed and the case remanded for further proceedings. for the premises it was not obligated Jones v. Live Nation Entertainment, Inc., 2016 IL App (1st) 152923. to provide security or safeguards for the attendees and that it was only a licensee and not in full possession MEDICAL MALPRACTICE of the premises. The appellate court rejected the arguments because Hospital Did Not “Hold Out” an Independent Physician Because the Patient Did Not the plaintiff was not a party to Understand the Consent Form He Signed the rental agreement. In Mizyed v. Palos Community Hospital, an illiterate patient with limited English language skills, alleged a hospital was liable for a staff physician’s negligence. The patient could not read at all The appellate court initially noted that the trial court violated (in any language) but his adult daughter who could read and speak the established rule that while an interlocutory appeal is pending, English had directed him to sign the various consent forms presented the trial court only retains jurisdiction to hear matters unrelated to him. The consent forms gave notice that the physicians providing to those on appeal. The appellate court believed the answers to care at the hospital were independent and not the hospital’s agents the interrogatories were “integral” to whether the plaintiff could or employees. establish negligence on the part of Live Nation, and found that the The patient alleged that the hospital was vicariously liable for trial court abused its discretion in denying the plaintiff’s motion for the physicians’ negligence because the physicians were the hospital’s reconsideration. actual or apparent agents. In her deposition, the physician testified The gist of Live Nation’s argument was that under its rental that she was not employed by the hospital, that the hospital did not agreement for the premises it was not obligated to provide security direct her care, that she was on call when the patient came in, and or safeguards for the attendees and that it was only a licensee and that she was assigned the patient because he did not have a physician. not in full possession of the premises. The appellate court rejected The hospital moved for summary judgment arguing that the patient the arguments because the plaintiff was not a party to the rental could not establish that the hospital had “held out” the physician as agreement. “Plaintiff, who was invited by Live Nation to a Live — Continued on next page

IDC 2016 SURVEY OF LAW | 69 Survey of 2016 Tort Law Cases (Continued) its agent. Rather, the hospital argued that the signed consent forms gave notice to the patient that physicians were not employees or The court ultimately held that agents of the hospital. The patient argued that a question of fact remained as to whether the physicians’ actions would cause a rea- “a hospital may be held liable under sonable person to believe they were agents of the hospital. The trial the doctrine of apparent agency for court granted the hospital’s motion for summary judgment, which the acts of the employees at an the appellate court affirmed. independent clinic that is not a party The patient argued on appeal that his illiteracy and limited English skills negated the ability of the consent forms to provide to the litigation” if the plaintiff can notice. The court rejected this argument holding that “the explicit establish the required elements of language of those consent forms put him on notice that his treat- apparent agency. ing physicians” were not the hospital’s agents or employees. The court noted that the focus of “holding out” is not actual notice; it is whether the patient should know that the physician is an independent contractor, which he did. Nor was the court persuaded by arguments Northwestern Hospital as the primary site for acute hospital care for that the patient did not have notice because he could not read the the clinic’s patients. The clinic was independent, federally funded, consent forms. Instead, the court held that the patient’s “inability to and its employees were not employees of Northwestern entities. The read or speak English does not undermine the effect of the consent clinic and Northwestern did not use joint marketing and the clinic forms that he signed.” In accord with Illinois law, by signing the managed itself, had its own board of directors, budget, and facil- consent forms the patient evidenced he had the opportunity to review ity. However, the clinic’s website did represent that its physicians and understand them. had faculty status at Northwestern University Feinberg School of Medicine and that its students trained at the clinic. Northwestern Mizyed v. Palos Community Hospital, 2016 IL App (1st) 142790. Hospital’s website did identify that it had an affiliation with the clinic, and two of its representatives were on the clinic’s board. The plaintiffs alleged that Northwestern Hospital held the clinic out as Hospitals May Be Liable for the Acts of its agent by publishing materials about the clinic on its website, and Unrelated and Independent Clinics that the hospital’s annual report discussed the clinic, and stated that the clinic’s physicians were affiliated with one of the Northwestern In Yarbrough v. Northwestern Memorial Hospital, defendants entities. Northwestern Memorial Hospital and Northwestern Faculty Foun- The issue before the court was whether a hospital can be held dation were sued for the alleged negligence of an independent vicariously liable under the doctrine of apparent agency set forth in clinic, which the plaintiffs had alleged was their apparent agent. Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511 (1993), and The plaintiffs were parents of a baby that was born prematurely its progeny for the acts of the employees of an unrelated, independent with significant health problems. The cause of the premature birth clinic not a party to the litigation. Ultimately, the court answered was the condition of the mother’s uterus that was identified at an this question in the affirmative. unrelated hospital but was disregarded by the physician at the clinic. The court noted that Gilbert applies outside the context of the The plaintiffs did not sue the clinic. four walls of the hospital. The pertinent question is whether the The plaintiff mother received prenatal care from the clinic. She plaintiff can establish “that the hospital’s ‘conduct led [the plain- was told that by receiving prenatal care at the clinic she would deliver tiff] to rely upon [‘the hospital’] for treatment, rather than on any and receive additional care at Northwestern Hospital. The plaintiff particular physician.’” Yarbrough v. Northwestern Mem’l Hospital, mother believed she was receiving treatment from Northwestern 2016 IL App (1st) 141585, ¶ 40. Hospital caregivers based on the information the clinic gave her. The court ultimately held that “a hospital may be held liable The clinic was a separate entity from the Northwestern defendants. under the doctrine of apparent agency for the acts of the employees The clinic and the parent company of Northwestern Hospital had of an independent clinic that is not a party to the litigation” if the an agreement for the purpose of increasing the parent company’s plaintiff can establish the required elements of apparent agency. services to the community. Pursuant to the agreement, the clinic used Yarbrough, 2016 IL App (1st) 141585, ¶ 45. The basis of this holding

70 | IDC 2016 SURVEY OF LAW was the Illinois Pattern Jury Instructions, Civil 105.11, for “Claims was no reason to impose the statute of limitations that the decedent Based on Apparent Agency—Principal Sued, But Not Agent.” This would have faced without also allowing the benefit of the discovery specific instruction is required for claims where the plaintiff claims to rule, to which the decedent would have been entitled. The case was have relied on the principal’s “holding out” of the agent. Ultimately, remanded for a determination of when the statute began to run. the case was remanded to proceed in accord with the order. Moon v. Rhode, 2016 IL 119572. Yarbrough v. Northwestern Mem’l Hospital, 2016 IL App (1st) 141585. Expert Qualifications

Discovery Rule Applies to Wrongful Death In Hall v. Flannery, the mother of a teenage girl who died and Survival Action three days after having surgery to repair an old skull fracture, Based on Medical Malpractice sued her daughter’s surgeons and the hospital where the procedure was performed. After the girl’s death, the pathologists eventually In Moon v. Rhode, the plaintiff’s mother died during a relatively determined that a seizure caused by surgical damage to the brain brief hospital stay. Within two years of her death, the plaintiff (who caused the girl’s death. At trial, three defense experts offered cause was an attorney) collected her medical records, obtained a physi- of death testimony. One of these experts, a pediatric neurosurgeon, cian’s report that the treaters’ care was negligent, and filed a medical opined that the girl’s cause of death was not a seizure but focal in- malpractice claim against them. terstitial chronic inflammation of the heart. The plaintiff’s attorney The plaintiff did not seek a review of his mother’s CT scans objected that the testimony lacked foundation, the opinions were until four years after she died. That review opined that the radiologist not properly disclosed, and that the expert was unqualified to offer had been negligent. Thereafter, the plaintiff sued the radiologist and such an opinion. The district judge, allowed the testimony because her employer. The suit was filed more than two years, but less than the opinion was disclosed and did not violate any of the motions in four years, after his mother’s death. limine. At the conclusion of the trial judgment was entered in favor The radiologist and her employer argued the complaint should of all the defendants. be dismissed because plaintiff’s claim was time-barred. The plaintiff On appeal, plaintiff focused on the admission of expert tes- argued the discovery rule applied because he was ignorant of the timony. Issues with two of her experts were waived because they radiologist’s alleged negligence until he obtained the review. The were improperly raised. The court of appeals did, however, evaluate circuit court granted defendant’s motion and the appellate court af- the propriety of admitting the opinion of the pediatric neurosurgeon firmed. The appellate court found that the plaintiff was required to who opined that cardiac issues caused the death. The court of ap- file his complaint within “two years of the date on which he knew or peals found that the trial judge should have applied the Daubert/ reasonably should have known of” his mother’s death. The appellate Federal Rule of Evidence 702 framework to evaluate the expert’s court found the discovery rule in 735 ILCS 5/13-212(a) did not apply qualification. Because it was not done and should have been done, to wrongful death or survival claims based on medical malpractice. the court’s review of his qualifications and opinions wasde novo. The Illinois Supreme Court disagreed. First, it held that the As to the qualifications of the expert, the court of appeals held “statute of limitations in a wrongful death action alleging medical the expert was qualified to offer opinions on the surgery that was malpractice begins to run when a plaintiff knows or reasonably performed and any seizure that may have followed. These opinions should know of the death and also knows or reasonably should know were based on a reasonable methodology. The court found it was that it was wrongfully caused.” Moon v. Rhode, 2016 IL 119572, immaterial that he was not a pathologist because an expert is not ¶ 27. The court concluded that the specific medical malpractice required to be specialized. Moreover, the court noted that an opin- limitations and repose statute applied and not the general wrongful ion about whether a seizure occurred after surgery did not require death limitations period. Thus, the discovery rule likewise applied. knowledge special to a pathologist. Next, the court held that the It also found that this was consistent with the weight of appellate expert was not qualified to offer an opinion about the decedent’s authority that applied the discovery rule to wrongful death actions. heart issues. The expert did not have any specialized knowledge or Second, the court held that the discovery rule also applied to claims education regarding cardiology and arrived at his conclusion after he brought through the Illinois Survival Act. The court reasoned there — Continued on next page

IDC 2016 SURVEY OF LAW | 71 Survey of 2016 Tort Law Cases (Continued) found articles that discussed the unexpected death of young people court concluded that plaintiffs waive the protections of the physician from focal interstitial chronic inflammation. Last, the court found patient privilege by suing his or her physician, and that the defendant that the plaintiff’s substantial rights were affected by the admission physician’s ability to defend himself would be hampered if he could of the improper expert opinion. The court of appeals vacated the not speak to counsel privately. Thus court held that “Petrillo does not district court’s judgment and ordered a new trial. preclude ex parte communications with the individuals who serve as the corporate heads and who are decision makers of the accused Hall v. Flannery, 840 F.3d 922 (7th Cir. 2016). medical or podiatry corporation.” McChristian v. Brink, 2016 IL App (1st) 152674, ¶ 27. To manage the unusual situation, the court stated that the Ex Parte Contact with Control Group plaintiff could depose her treating podiatrist on issues related to the nature and extent of her injuries before the treating podiatrist could In McChristian v. Brink, the appellate court further refined the have any ex parte contact with the podiatry group’s attorney. After Petrillo doctrine as it applied to a treating physician, who was not the deposition, defense counsel was allowed to have ex parte com- sued in his individual capacity, but who is a member of another munications related to liability and causation aspects of the case. defendant’s control group. The facts of this case are unique. The plaintiff sued her former podiatrist and the podiatry group of which McChristian v. Brink, 2016 IL App (1st) 152674. he was a member. However, the plaintiff’s (then current) treating podiatrist was a member of the same podiatry group that the plaintiff sued and he was part of the control group. The defendants named Content of Hospital Credentialing the treating physician as an expert witness who would testify as to File Not Privileged the plaintiff’s prognoses, treatment, care, liability, causation, and damages. The defendants sought a protective order to allow contact In Klaine v. Southern Illinois Hospital Services, the plain- with the treating physician after the plaintiff refused to consent to tiffs sued a physician and hospital alleging medical malpractice. the contact and claimed any ex parte contact would violate Petrillo. The plaintiffs later amended to bring claims against the hospital The trial court granted the defendants’ motion and permitted defense defendants for negligently credentialing the defendant physician. counsel to engage in ex parte contact with the treating physician. In response to discovery, the hospital defendants withheld various Ultimately, the plaintiff was granted leave pursuant to Illinois Su- documents pursuant to the Medical Studies Act, 735 ILCS 5/8-2101, preme Court Rule 308 to appeal the trial court’s order. and the Health Care Professional Credentials Data Collection Act, The issue before the court was whether the ex parte contact 410 ILCS 517/1. Following an in camera review, the circuit court sought by defense counsel was prohibited to the extent any such agreed that some of the documents were privileged. However, the communication may be permitted. The court recognized that the court also ordered production of some of the documents, including issue set the patient-physician privilege that is protected by Petrillo the hospital’s credentialing files for the defendant physician and against the attorney-client privilege. On the one hand, as the plaintiff documents that were procedure summaries and case histories that argued, Petrillo preserves the physician patient privilege by forbid- the defendant physician performed at one of the hospitals. The ap- ding legal adversaries from talking about the plaintiffs care when pellate court affirmed the lower court except it required that one the physician is not a named defendant. On the other hand, as the report had to be redacted and information identifying patients should defendant argued, the treating podiatrist is a managing member of also be redacted. the defendant podiatry group and was within the control group, such The Illinois Supreme Court held that the defendant physician’s that his communication with the group’s counsel was privileged. applications for privileges were not privileged pursuant to the section The court acknowledged that the plaintiff set up a conflict 15(f) of the Health Care Professional Credentials Data Collection when she sued her former podiatrist and his podiatry group, while Act. Section 15(h) provides that credentialing data is “confidential, as continuing to treat with another podiatrist within the same group. provided by law.” The Illinois Supreme Court followed the reasoning The court noted, however, that Petrillo forbids ex parte communica- of the appellate court - a statute that renders certain records confiden- tions between physicians and third parties. Medical groups like the tial does not mean that the records are privileged. It further noted that podiatry group, however, are not third parties because they hold the disclosure of confidential information depends on whether applying medical records and are not disclosing them to a third party. The the interest in protecting the information is outweighed by the need

72 | IDC 2016 SURVEY OF LAW for probative evidence. The Illinois Supreme Court concluded that a left knee injury while sitting in a swivel chair at his workplace. the credentialing information was not privileged by statute and that The worker, a welder who had previously sustained an injury to his those files were the sole source of relevant evidence that the plaintiff right knee, had been allowed to perform his welding duties from required to maintain a claim for negligent credentialing. Further, the a seated position and had done so without incident for some three court disagreed that it had to read the Medical Studies Act and the years. The Commission determined that the act of turning in a chair Healthcare Professional Credentials Data in pari materia. was an activity of normal life and that the worker’s injuries did not, The Illinois Supreme Court also held that information that was therefore, arise from the employment. The appellate court disagreed. reported to the National Practitioner Data Bank was not privileged, The appellate court said that the worker typically welded some 70 even though it is confidential because the plaintiffs sued one of the lock mechanisms each day and that during the process, he was re- hospitals and its knowledge of the defendant physician’s competence quired to make repeated twists and turns in his chair. While turning was an issue. Information reported to the National Practitioner Data in a chair was a risk inherent in daily activity, the court found that Bank is confidential under the Health Care Quality Improvement the worker was exposed to the risk of twisting his knee to a greater Act but the information may be disclosed as authorized by law. The degree than the general public by virtue of his employment. National Practitioner Data Bank itself may disclose information to an attorney who has filed a medical malpractice complaint against Adcock v. Illinois Workers’ Compensation Comm’n, 2015 IL App a hospital and that such information may be used in the litigation (2d) 130884WC. against the hospital. Finally, the Illinois Supreme Court held that the physician- patient privilege did not apply to protect case summaries that did Illinois Police Officer’s Back Injury Lifting not contain any patient identifying information. The applications and Duty Bag at Home Found Compensable case summaries simply listed procedures and treatments provided by the defendant physician. A police officer, who injured his back as he lifted his “duty bag” to place it in his personal vehicle prior to leaving his home Klaine v. Southern Illinois Hospital Services, 2016 IL 118217. for work sustained an injury arising out of and in the course of his employment, held a divided Illinois appellate court. The majority of the court agreed with the Commission that at the time of the police WORKERS’ COMPENSATION officer’s injury, he was furthering the interests of the police depart-

Reprinted from Illinois Workers’ Compensation Guidebook, 2016 Edition with permission. © 2016 Matthew Bender & Company, Inc., a member of the LexisNexis® Group. The majority of the appellate court All rights reserved. stressed that to be compensable, an injury must also occur while the officer COVERAGE AND was engaged in an activity that was COMPENSABILITY incidental to his position.

ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT ment. The officer’s duty bag weighed approximately 40 pounds and contained the equipment the officer used on patrol—a Kevlar Welder’s Injury in Swivel Chair Accident helmet, gas mask, vehicle and criminal codes, incident reports, Arose from Employment extra ammunition, his handcuffs, and a few other items. The officer admitted that he had some prior issues with his back, but he testified An Illinois appellate court reversed a Commission’s order that the pain he felt upon lifting the bag that day was significantly denying workers’ compensation benefits to a welder who sustained — Continued on next page

IDC 2016 SURVEY OF LAW | 73 Survey of 2016 Tort Law Cases (Continued) greater and different than before. The police department contended Substantial Evidence Supported that the officer was not required to take the duty bag home and that Commission’s Finding that Injury Arose Out since the accident occurred at home, it was not causally connected Of and In the Course Of the Employment to the employment. The majority of the appellate court stressed that to be compensable, an injury must also occur while the officer An award of benefits was proper because the claimant reported was engaged in an activity that was incidental to his position. The to an urgent care clinic, the medical report indicated that he expe- majority indicated that because law enforcement duty bags contain rienced “mild pain when pulling something at work,” the claimant live ammunition and other law enforcement equipment, they would reported that he was lifting a hand jack when he felt a click in his pose a risk to the public if left unattended. Leaving them unattended back followed by low back pain that increased over several days, also presented an unprofessional image, undermining the public’s and the medical records provided details of the work injury suffered confidence in law enforcement. The employer, therefore, had a direct by the claimant. The determination of whether an injury arose out interest in seeing that its officers maintained the safekeeping of the of and in the course of a claimant’s employment was a question of equipment that was necessary for their duties on patrol. The majority fact for the Commission to resolve, and its finding in that regard reasoned that since claimant was injured while performing actions would not be set aside on review unless it was against the manifest that were directly related to this job-related task, his injuries arose weight of the evidence. from the employment. S&C Electric Co. v. Illinois Workers’ Compensation Comm’n, 2015 Bolingbrook Police Dep’t v. Illinois Workers’ Compensation IL App (1st) 141057WC. Comm’n, 2015 IL App (3d) 130869WC.

Officer’s Drive to Police Headquarters Flight Attendant’s Injury Claim on Board for Training was No Different than Plane While Traveling to Airport Where Next Ordinary Commute; Traveling Employee Flight was Scheduled was Barred by Going Doctrine Did Not Apply and Coming Rule Claimant, a police officer employed by the City of Peoria, An Illinois appellate court held that a flight attendant was not a sustained injuries in an automobile accident as he drove to police traveling employee for purposes of the state’s Workers’ Compensa- headquarters for mandatory training. It was snowing, and there was tion Act when she injured her knee on a flight from Denver to New ice and slush on the road. The circuit court confirmed a denial of York on the day before she was scheduled to work on a flight out workers compensation benefits by the Commission. The appellate of a New York airport. The court indicated the method and time court affirmed. The officer offered two primary arguments: (a) that of travel was the result of the claimant’s personal choices for her his employer maintained sufficient control over him that he remained own benefit, as she chose to live near Denver, and from which the within the scope of his employment at the time of the accident in claimant’s employer derived no benefit. Under the facts of the case, accordance with City of Springfield v. Industrial Comm’n, 244 Ill. the Commission ruled correctly in finding that the claimant did not App. 3d 408 (4th Dist. 1993), and (b) that he contends that he was qualify as a traveling employee at the time of her injury. Moreover, a traveling employee when the accident occurred. As to control, the the claimant’s decision to use a leisure travel pass provided by her court indicated that while claimant had been required to bring to employer to commute from Colorado to New York did not transform training his nightstick, gun belt, handcuffs and key, Taser, holster, and her regular commute into a demand or exigency of her job. training uniform, these items did not allow the employer to maintain control over his actions. In City of Springfield, the officer had been United Airlines, Inc. v. Illinois Workers’ Compensation Comm’n, required to bring a radio and beeper, which did allow the employer 2016 IL App (1st) 151693WC. to maintain control over the officer. As to the traveling employee doctrine, the court said it did not apply. At the time he was injured, he was driving from his home to the police station. The court said that while he was required to drive in hazardous conditions, that did

74 | IDC 2016 SURVEY OF LAW not distinguish the officer’s situation from that of any other com- on a hook located on her right boot. This could have happened muter in the northern half of this country. The court approved of the anytime or anywhere. In short, claimant was unable to establish Commission’s analysis that the traveling employee doctrine should she was exposed to a neutral risk to a greater degree than the not be extended to include any claimant involved in an accident on general public. the way to their normal workplace, driving their personal vehicle, without any additional compensation and not performing any duties KVF Quad Corp. v. Illinois Workers’ Compensation Comm’n, 2016 incidental to their job. IL App (3d) 150139WC-U.

Allenbaugh v. Illinois Workers’ Compensation Comm’n, 2016 IL App (3d) 150284WC. Evidence Did Not Support Commission’s Finding that Claimant’s Slip on Concrete Island in Parking Lot was Associated with a Claimant Fails to Establish that Exposure Risk Greater than that Faced by the Public to Neutral Risk of Tripping on Shoelace was Greater for Her than the General Public The appellate court held that the evidence did not support the Commission’s finding that claimant, who fell as she was descending Claimant testified that on the day of the injury, she felt de- a concrete island to the surface of a parking lot on the employer’s hydrated and weak and went into the employer’s office area to premises, was exposed to a risk to a greater degree than the general get some water and absorb some of the cool air. She testified that public. The appellate court indicated claimant’s fall was properly when she turned to get a bottle of water out of the refrigerator, the categorized as resulting from a neutral risk. By itself, traversing a lace on her left boot hooked on the hook on the right boot and her curb did not establish a risk greater than that faced by the general legs “just went down.“ At the time she fell, claimant stated her left public. The appellate court observed that the Commission found that arm was extended out. Medical tests indicated she had suffered claimant was exposed to the risk of traversing a curb to a greater a rotator cuff tear. The arbitrator concluded that claimant failed degree than the general public, based on evidence that: (1) there may to prove she sustained an accidental injury that arose out of and have been some ice on the edge of the concrete island that caused in the course of her employment and denied benefits under the claimant to fall, (2) the accident occurred in an area not open to the Act. The Commission reversed, finding that even though claimant general public, (3) claimant told emergency-room personnel that chose the specific type of work boot she was wearing on the date she “turned around quickly,” and (4) claimant was carrying a sack of injury, she was nevertheless required to wear steel-toed boots with food used for nourishment while she was driving her bus. The with metatarsal supports that she would not have been wearing appellate court said none of these factors supported a finding that “but for” her employment, and therefore, claimant was exposed claimant was exposed to a risk to a greater degree than the general to a greater risk than the general public and her injury arose out public. There was little, if any, direct evidence that it had been icy of and in the course of her employment. Claimant’s boots had a on the date of the accidental injury. There was no evidence to show “speed lace” system, with some open hooks. It was on one of these how there was any risk of falling because the area was closed to the hooks that the other boot’s lace had been caught. The appellate public. While claimant may have been carrying a sack at the time court indicated that the risk of tripping as the result of shoelaces of the injury, there was no evidence to say that the sack caused the catching on a hook on the opposite shoe was a neutral risk. Ac- fall. In sum, the appellate curt said that the evidence did not sup- cordingly, claimant bore the burden of showing she was exposed port a finding that claimant sustained an accident arising out of her to an increased risk of either a qualitative nature, or a quantita- employment as a bus driver for the employer. tive nature. The appellate court disagreed with the Commission, indicating that claimant chose her particular boot because it was a McLean County School Dist., Unit 5 v. Illinois Workers’ Compensa- high top that would provide her “more protection” and it was the tion Comm’n, 2016 IL App (4th) 150248WC-U. most comfortable boot she tried on. Neither claimant’s workplace conditions nor the employer’s steel toe policy contributed to the risk of claimant falling as a result of her left bootlace catching

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Commission’s Decision that Claimant had was also not required to engage in any physical fitness program, work Not Sustained Injury Arising Out Of and out, or maintain any specific level of physical fitness. The Fall Fitness In the Course Of the Employment was Not Challenge was a program that was available to all City employees Against Manifest Weight of the Evidence and their immediate family members who were 16 years of age and older. Both claimant and claimant’s supervisor testified at arbitration The appellate court held that the Commission’s finding that that the Fall Fitness Challenge was a “voluntary program.” More- the claimant failed to prove that he sustained an accidental injury over, when registering for the program, claimant indicated on the arising out of and in the course of his employment was not against registration form that his participation was voluntary. The record the manifest weight of the evidence, where claimant contended he failed to reflect claimant would have suffered any repercussions developed cubital tunnel syndrome and its associated symptoms by not participating in the Fall Fitness Challenge specifically. His while performing work-related services at work on April 5, 2010, injuries did not arise out of and in the course of the employment. but three separate entries in the April 6, 2010 emergency room re- cords (which were authored by three different individuals) suggested Darin v. Illinois Workers’ Compensation Comm’n, 2015 IL App instead that the claimant began experiencing pain and numbness in (3d) 140536WC-U. his left arm while washing and/or drying his hair at his home that afternoon, not at work the previous day. It was the Commission’s province to resolve conflicts in the evidence and to draw reasonable General Curriculum Teacher’s Injuries inferences from the evidence. Showing 3rd Grade Students a Movement on the Balance Beam Arose Out Of and Cady v. Illinois Workers’ Compensation Comm’n, 2016 IL App (3d) In the Course Of the Employment 140807WC-U. Claimant was employed as a third-grade teacher. One of her du- ties was to escort her class to the gymnasium for physical-education Commission’s Determination that Fire class (PE). Barbara Williams, who was certified to instruct such Chief was Participating in a Voluntary classes, taught physical education. Claimant taught the general Recreational Program at Time of Injury curriculum (math, English, science, etc.). Claimant had previously was Not Against the Evidence; participated in certain aspects of the PE class, including jumping Claimant was Not Forced to Participate rope, bowling, and running a mile with her students. On the day of her injury, claimant escorted her class to the gymnasium, where The divided appellate court found that the Commission com- Williams was conducting a gymnastics class. Claimant, who was a mitted no error in finding claimant’s alleged work injuries occurred former gymnast, came to retrieve her students at the end of the PE while he was participating in a voluntary recreational program. class. She was familiar with balance beams. With the assistance of Pursuant to section 11 of the Workers’ Compensation Act (820 ILCS Williams, claimant attempted to demonstrate a gymnastics move 305/11 (West 2010)), he did not sustain a compensable work-related (a foot dip). Her students were seated, watching claimant, and ac- injury where claimant, a fire chief for the City of East Peoria, sus- cording to claimant, she attempted to demonstrate the move for their tained injuries to his knees on two separate occasions in September of benefit. Claimant testified that she walked to the end of the balance 2010 while exercising during the “Fall Fitness Challenge,” a physical beam and attempted to pivot. Her right toe “caught the surface of fitness program which the employer offered to its employees free the balance beam.” Claimant’s ACL tore. The sole issue presented of charge. The majority of the appellate court acknowledged that in this appeal was whether claimant’s accident arose out of her although section 11 of the Act provided some general examples of employment. The arbitrator found that it did. The Commission af- activities that may be considered “recreational,”—such as “athletic firmed, but the circuit court set aside the Commission’s decision, events, parties, and picnics”—the Act did not expressly define the holding that the injury did occur in the course of the employment, term. Finding that the activities were “recreational,” the majority but that it did not arise out of the employment. The appellate court turned to the issue of whether participation in the program was disagreed. It observed that the Commission found that it was not voluntary. The majority indicated that unlike firefighters under his unforeseeable or unreasonable that claimant would seek to instruct command, claimant was not required to pass an annual physical. He her students in “the finer points of a school sanctioned activity that

76 | IDC 2016 SURVEY OF LAW she happened to have personal experience in.” She was not doing he had consented to be a packager, but had never consented to use something “totally outside or unrelated to her duties.” Rather, claim- a large blender (upon which he sustained his injuries), the record ant “was a teacher engaged in the task of educating her students, on indicated that shortly after his work shift began, he followed the di- a subject they were in fact receiving instruction for and in a class rection from Sterling’s floor supervisor to move from the packaging that was part of their curriculum.” Illinois Workers’ Compensa- area in the front of the facility to the manufacturing area in the back tion Comm’n v. Anderson, 2015 IL App (2d) 141153WC-U, ¶ 23. of the facility to assist another worker’s work on the blender, that Indeed, claimant testified that she performed the demonstration for plaintiff listened to the instructions and watched the other worker the benefit of the students. It is further undisputed that she did so demonstrate how to operate the machine. The court said, therefore, with the consent and assistance of the teacher (Williams) in charge the undisputed facts demonstrated that plaintiff acquiesced to em- of physical education. The record also established that claimant had ployment with Sterling, a borrowing employer. been permitted to participate in other aspects of PE. The Commission could have—and did—reasonably conclude that using the balance Villaseñor v. Sterling Brands, LLC, 2016 IL App (1st) 143387-U. beam was not an inherently dangerous activity in light of the fact that respondent had been permitting 9-year-old children to engage in the activity for years. Accordingly, the Commission’s decision CAUSAL CONNECTION was not contrary to the manifest weight of the evidence. Claimant’s Self-Treatment of Foot Blister Illinois Workers’ Compensation Comm’n v. Anderson, 2015 IL App Did Not Break Chain of Causation (2d) 141153WC-U. A claimant’s self-treatment in the form of lancing a blister on his foot with a sterilized needle was not an independent intervening BORROWED EMPLOYEES act that would break the chain of causation between the work-related blister and a subsequent infection, held an Illinois appellate court, A Borrowing Employer is Entitled reversing a finding by the state’s Commission. The court utilized to the Immunity from Tort Provided a “but-for” analysis, noting that the infection would not have oc- by the Illinois Workers’ Compensation Act curred except for the existence of the blister. An IME testified that there was a causal connection between the claimant’s foot condi- Summary judgment as to injured employee’s tort suit was af- tion and the nature of claimant’s work. Claimant drove a truck and firmed where the undisputed evidence led to but one conclusion that repeatedly had to engage a clutch pedal. The infection was a natural defendant manufacturing facility was a borrowing employer entitled consequence of his injury. to the protection of Illinois’ workers’ compensation system. Noting that whether an individual was a borrowed employee was generally Dunteman v. Illinois Workers’ Compensation Comm’n, 2016 IL App a question of fact, the court added that the primary consideration in (4th) 150543WC. determining whether a borrowed employee relationship has been created is whether the borrowing employer had the right to control and direct the manner in which the claimant performed the work. A Where There was a Conflict in the second factor to be considered was whether there was a contract of Medical Evidence as to Causation, hire between the borrower and the worker. As to the first factor, the it was for the Commission, Not the Circuit court observed that plaintiff had been working at the Sterling facility Court, to Weigh the Evidence and for a while and whenever he was there, a Sterling supervisor gave Make a Determination him work assignments and told him when to take breaks. Temporary employees worked the same shifts and alongside Sterling’s regular Where claimant was awarded TTD benefits after he sustained a employees. Sterling had the authority to discharge any of them from work-related injury, the Commission’s decision regarding causation employment at its facility. Even the paperwork with which plaintiff was not contrary to the manifest weight of the evidence because came into weekly contact indicated that plaintiff was subject to the the medical records supported claimant’s testimony regarding the supervision of Sterling’s supervisors. While plaintiff indicated that — Continued on next page

IDC 2016 SURVEY OF LAW | 77 Survey of 2016 Tort Law Cases (Continued) recurrence of leg pain after surgery. The mere fact that two doctors Claimant Fails to Establish Causation as to interpreted the MRI differently did not undermine the Commission’s Her Fall on Courthouse Steps decision, nor did the existence of a pre-existing back condition preclude recovery under the Illinois Workers’ Compensation Act. The appellate court, in a split decision, found that the Commis- The Commission properly used claimant’s employment at the time sion’s determination that claimant did not suffer an accident arising of his injury, rather when he was hired, in calculating his average out of her employment was not against the manifest weight of the weekly wage. “Employment” as used in 820 ILCS 305/10 (2010) evidence. Claimant, the Coles County court administrator, testified meant the position in which a claimant was working at the time of that she went to the courthouse to retrieve documents for mailing, his or her injury. that as she neared the building, she saw two persons at a door that was normally locked to the outside. One was a judge carrying ABF Freight System v. Illinois Workers’ Compensation Comm’n, a microwave oven and the other was a security officer who was 2015 IL App (1st) 141306WC. holding the door open. She said both told her to come through the north door of the courthouse so she wouldn’t have to walk around the building. She indicated she hurried up the steps to the entrance, Lieutenant/Paramedic Found Entitled tripped and fell. She said she hurried because she did not want to to Benefits for Post-Traumatic Stress hold them up. She indicated that she must have tripped on something. Disorder Following Fatal Fire She alternatively indicated several of the steps had irregular height. The majority of the appellate court observed that the Commission A lieutenant/paramedic for a village fire department was entitled found that claimant failed to prove an accident arising out of her to recover for a psychological injury in the form of post traumatic employment. The majority added that the decision was supported stress disorder (PTSD) caused by a sudden, severe, emotional shock by the evidence. Claimant failed to present evidence explaining he experienced when a firefighter died in a fire over which the lieu- the cause of her fall. While she presented evidence the steps were tenant had exercised command. Citing, inter alia, Pathfinder Co. v. of varying heights, she failed to present any evidence she fell due Industrial Comm’n., 62 Ill. 2d 556 (1976), the court found that the to this condition. In fact, as previously noted, claimant was unsure incident was not the kind of event that an employee would be subject what caused her to fall, stating alternatively “I lost my footing” and to during the normal course of employment. The court noted that “I tripped on something.” Although claimant testified she thought following the incident, it must be believed the first responders suf- she tripped on a step, she was unable to specify on which step she fered a sudden, severe, emotional shock of greater dimension than might have tripped. Without more specificity, the majority said it emotional strain and tension all employees experience from worry, would have to speculate as to the cause of claimant’s fall, and more anxiety, pressure and overwork. For the first time in the history of the specifically, whether the varying heights of the steps contributed to fire department, the department ceased performing fire suppression her fall. The majority noted, for example, the difference in height and emergency medical service operations and referred all calls to between the fourth and fifth steps was only 0.125 inches, a differ- mutual aid companies for a period of approximately ten days. The ence so negligible it clearly could not be characterized as a defect. court found that the Commission’s decision that the claimant did not sustain accidental injuries that arose out of and in the course of his Williams v. Illinois Workers’ Compensation Comm’n, 2016 IL App employment with the employer was against the manifest weight of (4th) 150126WC-U. the evidence. The lieutenant’s psychological injuries stemmed from a single, traumatic event from which he should have been entitled to recover for his psychological disability. Commission has Broad Discretion in Making Causation Findings Moran v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 151366WC-U. The Commission’s determination that the claimant failed to prove that he sustained accidental injuries arising out of and in the course of his employment on July 10, 2006, was not against the manifest weight of the evidence where his coworkers did not remember him hurting his back on that day, there was no docu-

78 | IDC 2016 SURVEY OF LAW mentation that he reported the accident despite his claim that he Commission is Empowered to did, and he had a history of back trouble as far back as 1991. The Weigh Evidence of Employment Commission’s determination that the claimant failed to prove that he vs. Independent Contractor Status sustained a repetitive trauma injury arising out of and in the course of his employment was also not against the manifest weight of the The appellate court held in relevant part that since claimant’s evidence because he alleged his back injury was the result of two job had elements of both an independent contractor and an employee, specific injuries. The Commission’s determination that the claimant the Commission’s finding that an employment relationship existed sustained an accidental injury on May 7, 2010, and that such injury between claimant and respondent was not against the manifest weight caused his current condition of ill-being was not against the mani- of the evidence. Claimant, who owns and operates a semi-tractor, fest weight of the evidence where the claimant testified about the agreed to work for the tank lines company and attended two days of accident, a coworker corroborated his testimony, the claimant was training. He signed, but did not read, various agreements in connec- picked up from his place of employment by ambulance and taken tion with the work. Among other things, those documents indicated to the hospital for treatment, and there was medical testimony that claimant was an independent contractor and not an employee. The the accident aggravated his condition. appellate court observed that the two most important factors—the right to control and the nature of the work—supported the existence Freeburg Community School Dist. #70 v. Illinois Workers’ Compen- of an employment relationship between the parties. The Equipment sation Comm’n, 2016 IL App (5th) 140535WC-U. Lease provided that respondent had “exclusive possession, control and use of the leased equipment” and the right to sublease the equipment to other carriers. The tank lines company mandated that EMPLOYMENT STATUS claimant install a computer in his tractor that could be used to track the vehicle’s movements. Moreover, the company required claimant Truck Driver was an Independent to display its identifiers on his tractor and restricted the number of Contractor, Not Employee, Where He Made hours claimant could drive. The agreement had other restrictions as His Schedule and Could Refuse Loads well. Moreover, claimant did not make delivery arrangements with the company’s customers. Rather, he was required to call prior to In a decision that could have an impact on any Uber/Lyft litiga- the beginning of his designated shift to obtain a dispatch order. The tion within the state of Illinois, an appellate court affirmed a decision company issued dispatch assignments from its facility in Green by the state’s Workers’ Compensation Commission finding that a Bay, Wisconsin, providing the place of delivery, the amount of truck driver was an independent contractor rather than an employee, product to deliver, as well as a time frame for pick-up and delivery. and that the Commission did not err by denying the claimant workers’ Moreover, the Equipment Lease provided that claimant would not be compensation benefits where evidence showed that the employer compensated until he gave the company certain documents, includ- did not tell the claimant what route to take when making deliveries, ing a driver’s log, the applicable bill of lading or delivery receipt the claimant decided his own schedule for transporting the delivery, signed by the consignee, and, if required by the company’s customer, and where the claimant was able to pick and choose when he wanted the wash-out ticket(s) certifying that the trailer had been properly to drive and did not have to accept every load that was offered to cleaned. Other factors pointed to an employment relationship. Since him. The court also observed that the claimant owned his own truck the evidence established that there were factors that weighed both and was responsible for all operational expenses. Claimant paid for in favor of and against a finding that claimant was an employee, it insurance on the truck and the parties’ agreement stated that the was within the province of the Commission to weigh the evidence claimant was an independent contractor. and decide among competing inferences.

Esquinca v. Illinois Workers’ Compensation Comm’n, 2016 IL App Klemm Tank Lines v. Petrak, 2015 IL App (1st) 140352WC-U. (1st) 150706WC.

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REPETITIVE TRAUMA Smith v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150059WC-U. Claimant Established that Her Exposure to Trauma of Stepping Off Platform was Greater than that of the General Public WORKERS’ COMPENSATION FRAUD The uncontroverted facts regarding the frequency to which the claimant was exposed to the neutral risk of stepping down off Where Alleged Fraud Involved a platform established that the claimant was exposed to a risk of Issues of Fact, it was Appropriate for injury greater than the general public. The Commission’s decision Commission—Not the Circuit Court— that the claimant’s injuries did not arise out of and in the course of to Make the Determination her employment was accordingly reversed. Relying on medical opinions offered by two physicians that Hagan v. Illinois Workers’ Compensation Comm’n, 2016 IL App Fretts, a truck driver, was in need of lifting restrictions that prevented (1st) 143745WC-U. him from working for ABF, a trucking firm, ABF paid Fretts TTD payments through September 15, 2011. On that date, it received information suggesting Fretts was driving and receiving pay from Commission’s Decision that Claimant another trucking company. ABF hired a private investigator who Failed to Show Causal Connection followed Fretts and videotaped him lifting weights at a local gym. Between Bilateral Carpal Tunnel Syndrome After reviewing the videotaped surveillance, an orthopedic surgeon and Employment was Affirmed concluded that Fretts was physically capable of exceeding the lifting restrictions placed upon him by his doctor and that he was able to The appellate court held the Commission’s finding that the return to his prior work with ABF. ABF then brought a motion for claimant failed to prove that his bilateral carpel tunnel syndrome determination of workers’ compensation fraud before the Commis- was causally related to his employment was not against the mani- sion. ABF’s motion for a determination of fraud was heard before fest weight of the evidence where the evidence tended to show that a Commission arbitrator. At the hearing, Fretts testified that he was four weeks before claimant began working for the employer as a unable to obtain other work. He admitted that he worked for the other laborer and concrete finisher, he sought medical treatment for pain trucking firm for a couple of days driving a flatbed and a pickup and numbness in his hands and was diagnosed with carpal tunnel truck to Louisiana. The arbitrator determined that a few days of light syndrome. The pain subsided but returned after two months of work duty work did not constitute a stable labor market for purposes of with the employer. The court indicated that even if the claimant had determining TTD eligibility under the Workers’ Compensation Act, a preexisting degenerative condition that made him more vulnerable and in a written order denying ABF’s fraud claims, the arbitrator to injury, recovery for an accidental injury would not be denied as found that “[ABF] failed to show any statement by [Fretts] that was long as he can show that his employment was also a causative factor. both intentional and fraudulent regarding his working for Havener It is, however, the Commission’s province to assess the credibility of Enterprises while collecting TTD.” She also concluded that ABF witnesses, draw reasonable inferences from the evidence, determine “[had] not proven by a preponderance of the evidence, that [Fretts] what weight to give testimony, and resolve conflicts in the evidence committed a fraudulent act.” ABF Freight System v. Fretts, 2015 IL (particularly the medical opinion evidence). The claimant argued that App (3d) 130663, ¶ 6. a reasonable person could conclude that there was a causal relation- One week after filing the motion for workers’ compensation ship between the carpal tunnel condition that evolved from repetitive fraud, ABF filed a civil complaint against Fretts alleging that Fretts trauma and the claimant’s work activity. The court said, however, the (1) fraudulently obtained TTD benefits from ABF while receiving issue was not whether the evidence supported a reasonable inference compensation from another employer, (2) made material misrepre- of causation. Rather, the question was whether the contrary inference sentations to obtain insurance benefits, and (3) committed workers’ drawn by the Commission was against the manifest weight of the compensation fraud. In his motion to dismiss, Fretts argued that evidence. After carefully reviewing the evidence presented in this ABF’s complaint should be dismissed because, among other things, case, they held that it was not. (1) the doctrines of res judicata and collateral estoppel barred ABF’s

80 | IDC 2016 SURVEY OF LAW claims, and (2) the trial court lacked jurisdiction to hear fraud claims PERMANENT TOTAL DISABILITY related to a workers’ compensation case. The appellate court, in a split decision, found dismissal was appropriate. The majority said Commission’s Decision that Claimant the relevant inquiry was whether the issues in the case involved Failed to Establish Permanent Injury Under questions of law or factual issues related to the workers’ compen- “Odd Lot” Category was Not Against sation accident, the nature or extent of the employee’s injury, or Manifest Weight of the Evidence the potential defenses to the workers’ compensation claim. Here the alleged fraud involved issues of fact that the Commission was Claimant, a native of Mexico, began working as a carpenter better positioned to decide. Accordingly, the circuit court’s role was for the employer. On December 12, 2005, claimant injured his right appellate only. shoulder and lower back at work while assisting two co-workers lift a large block that weighed over 500 pounds. At the time of the injury, ABF Freight System, Inc. v. Fretts, 2015 IL App (3d) 130663. claimant, who is right-hand dominant, was 50 years old. Following treatment, he was discharged from medical care with permanent restrictions limiting him to sedentary work with occasional lifting BENEFITS of no more than 10 pounds and no twisting, bending, climbing lad- ders, or kneeling. Claimant testified that he looked for work, but was MEDICAL CARE not able to find any. Claimant also reported that he can lift no more than a gallon of milk, walk for no more than a block, stand for no Commission’s Decision to Allow for Only more than 10 to 15 minutes, and sit for no more than 20 minutes. Six of 88 Chiropractor’s Treatments Not Claimant told a vocational rehabilitation counselor that he could Against Manifest Weight of Evidence drive “very little” because braking hurt his back and steering hurt his right arm. An arbitrator found that claimant was not totally disabled The appellate court held the Commission’s decision to reduce from performing any type of work, but rather was limited to light the claimant’s medical expenses award by $30,461.68, based on its to sedentary duty. The arbitrator found that claimant was “evasive” finding that only his initial six visits to a chiropractic office for low- about his educational history. The arbitrator also found that claimant back treatment were reasonable and necessary was not against the appeared to exaggerate his disability with respect to his ability to manifest weight of the evidence, where the IME orthopedic surgeon perform tasks associated with daily living as claimant’s complaints indicated that only the first month of the chiropractor’s care could were not corroborated by the medical records. Finally, the arbitrator be justified and where the employer had the chiropractic charges found that claimant did not conduct an appropriate job search. The undergo a utilization review by another orthopedic surgeon, who Commission affirmed in relevant part. The appellate court agreed. noted the claimant had 88 chiropractic visits. Like the IME physician, There was no evidence that claimant’s disability was so limiting in the UR physician indicated that only the initial few weeks of care by nature as to render him obviously unemployable. While claimant the chiropractor should have been allowed. The court observed that sought permanent and total disability under the odd lot category, the Commission was presented with conflicting medical opinions the Commission agreed that he failed to establish his burden by as to the necessity of the chiropractic treatment. The resolution of showing either (1) a diligent but unsuccessful attempt to find work conflicting medical testimony fell within the province of the Com- or (2) that because of his age, skills, training, and work history, mission, and its findings will not be reversed unless they are against he will not be regularly employed in a well-known branch of the the manifest weight of the evidence. labor market. Claimant began his job search in July 2010, just five months prior to the arbitration hearing, notwithstanding that he was Centeno v. Illinois Workers’ Compensation Comm’n, 2016 IL App released from medical care with restrictions more than two years (2d) 150575WC-U. earlier. Although several of the employers identified by employment counselors indicated that they were accepting applications for current and future needs, claimant admitted that he did not complete any job applications. More significant, as the Commission emphasized, claimant’s job search was directed at employers unlikely to have po-

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IDC 2016 SURVEY OF LAW | 81 Survey of 2016 Tort Law Cases (Continued) sitions within the permanent work restrictions imposed by claimant’s the employer’s conduct was not the result of simple inadvertence physicians. The Commission also found that claimant improperly or neglect as the employer made a deliberate decision not to honor limited his job search by consulting only Spanish-language news- its statutory obligations to the worker. papers notwithstanding evidence that his understanding of English was sufficient to conduct a broader job search. Oliver v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 143836WC. City of Chicago v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 142637WC-U. SETTLEMENTS

TEMPORARY TOTAL DISABILITY Employer was Due a Credit for Claimant’s Previous Settlement Agreement for a Penalties Should Have Been Imposed Partial Loss of Use of His Left Arm Where Employer’s Reason for Delay in Payment was Based on Fact that Claimant The claimant sought benefits for injuries to his left arm allegedly Did Not File Claim on Date of Injury, sustained while employed as a street light maintenance electrician for but Six Days Thereafter the City of Chicago. The arbitrator found that the claimant’s injuries resulted in a 17% loss of the person-as-a-whole under section 8(d) Claimant filed a workers’ compensation claim six days after the (2) of the Act. 820 ILCS 305/8(d)(2) (West 2008). The employer alleged accidental injury. Claimant subsequently filed a petition for sought review of the arbitrator’s award before the Commission, penalties under sections 19(k) and 19(l) of the Act and attorney fees which modified the award, finding that the claimant’s injury to his under section 16 of the Act, claiming that the employer had not paid left arm was compensable as a scheduled injury under section 8(e) of TTD benefits or his medical bills. The employer filed a response, the Act. 820 ILCS 305/8(e) (West 2008). The Commission awarded asserting that it had subpoenaed the claimant’s medical records and the claimant a sum equal to the loss of 37.5% of the use of the left informed the claimant’s attorney of its need for additional records arm. The Commission further held that the employer was entitled to determine compensability. The matter went to an arbitrator, who to a credit for an earlier settlement that called for the employer to awarded TTD benefits and also awarded the claimant $4,230 in compensate for a 30% loss of use of that same arm. The claimant section 19(l) penalties, $17,011.50 in section 19(k) penalties, and sought judicial review of the Commission’s decision and the circuit $6,804.64 in section 16 attorney fees, finding that the employer’s court confirmed the Commission’s decision. Upon further appeal, the refusal to pay him TTD benefits and medical expenses was unreason- Court affirmed, noting that the overwhelming evidence supported the able and vexatious. The arbitrator noted that the employer did not Commission’s finding that claimant injured his “arm” as defined in dispute liability based on the claimant’s medical records; instead, the 820 ILCS 305/8(e)(10) (2008), but not his shoulder. Observing also employer denied benefits based on the fact that the claimant did not that claimant had received an earlier settlement for loss of use of the report the accident until six days after it occurred. The Commission same arm, it said the employer was entitled to a credit. The court was found that penalties and attorney fees should not have been imposed not persuaded by claimant’s argument that since the earlier injury against the employer because the employer’s conduct in the defense would now have been compensated as loss of use of the person as of this claim was neither unreasonable nor vexatious. The appellate a whole (earlier injury related to claimant’s rotator cuff), and not of court reversed, noting that all of the Commission’s purported reasons the arm, the employer should not have been allowed a credit. The to support the employer’s refusal to pay benefits centered around the fact that the claimant might be compensated differently today for fact that the worker did not report his accident on the day it occurred, an injury that occurred in 1995 did not change the fact that he was which was not a legitimate basis for denying workers’ compensa- compensated under section 8(e) of the Act in 1998. tion benefits. The worker’s notice after six days clearly fulfilled the purpose of the Workers’ Compensation Act’s notice requirement Dorsey v. Illinois Workers’ Compensation Comm’n, 2016 IL App and was not a legitimate basis for withholding benefits. The Com- (1st) 143044WC. mission’s determination that the employer’s refusal to pay benefits was reasonable was against the manifest weight of the evidence, as

82 | IDC 2016 SURVEY OF LAW WAGE-DIFFERENTIAL BENEFITS continued to work as a beer truck driver after the accident. In 2003, the worker began losing time from work on account of a separate Wage-Differential Award Might Be work-related injury to his cervical spine. Possible Even Where Post-Injury Reversing the circuit court, the appellate court found that claim- Wages Remained the Same ant proved both elements of a claim for wage-differential benefits under 820 ILCS 305/8(d)(1) (1998). The court added that if his Whether an injured worker has sustained an impairment of wage-differential benefits were terminated as of the date he began earning capacity cannot be determined simply by comparing the missing work due to his subsequent neck injury, or as of the date worker’s pre- and post-injury income. Other factors, including the he became entitled to collect PTD benefits as a result of his neck nature of the post-injury employment in comparison to wages the injury, he would not be made whole. claimant could earn in a competitive job market must be consid- ered. Thus, where the claimant’s employer continued to employ Chlada v. Illinois Workers’ Compensation Comm’n, 2016 IL App her as a safety officer at the same wage she earned as an engineer, (1st) 150122WC. the Commission erred in focusing solely on her post-injury wages. For example, wages paid an injured employee out of sympathy, or in consideration of long service with the employer, clearly did not PERMANENT PARTIAL reflect his or her actual earning capacity and should be discounted DISABILITY BENEFITS accordingly. The proper test in finding the loss of earning capacity was to determine as nearly as possible whether in a competitive labor Substantial Evidence Supported market the claimant, in his or her injured condition, could probably Commission’s PPD Finding Where Claimant sell his or her services and for how much. Under the circumstances, had Minor Residual Symptoms in His Wrist, the claimant might well have been entitled to a wage-differential Despite a 0 Percent Impairment Rating award and the case was remanded. The court noted that in determining the level of a claimant’s Jackson Park Hospital v. Illinois Workers’ Compensation Comm’n, permanent partial disability, 820 ILCS 305/8.1b(b) (2012) directs 2016 IL App (1st) 142431WC. the Commission to consider: (i) the reported level of impairment pursuant to § 8.1b(a); (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the Wage-Differential Benefits May Be employee’s future earning capacity; and (v) evidence of disability “Stacked” with PTD Benefits, at Least in corroborated by the treating medical records. Here the Commis- Some Circumstances sion’s finding that the claimant sustained permanent injuries to the extent of 5 percent loss of the use of his left wrist was supported According to the appellate court, the case raised an issue of by the evidence because the Commission outlined its findings on first impression regarding the interplay between wage-differential all of the factors listed within § 8.1b(b), including a finding that the benefits under section 8(d)(1) of the Act (820 ILCS 305/8(d)(1) claimant had some minor residual symptoms in his wrist, including (West 1998)) and PTD benefits under section 8(f) of the Act. (820 occasional pain in his left hand and some problems with his wrist ILCS 305/8(f) (West 2002)). Specifically, the case presented the when he worked around the house, played golf, or lifted something question whether a claimant may be entitled to collect both types of heavy. The appellate court held a 0 percent impairment rating does benefits simultaneously when his earning capacity was diminished not preclude an award for permanent partial disability benefits as by a work related accident and he subsequently suffered a second the statute expressly states that no single enumerated factor shall be work related accident that rendered him totally unable to work. The the sole determinant of disability. court answered the question affirmatively. Here, the worker suffered a partial incapacity following a 1999 Continental Tire of the Americas, LLC v. Illinois Workers’ Compen- work accident that prevented him from pursuing his usual and cus- sation Comm’n, 2015 IL App (5th) 140445WC. tomary line of employment as a beer truck driver. He was able to work in the warehouse, but earned less than he would have if he had — Continued on next page

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ILLINOIS WORKERS’ cross-examination, Dr. Gumprecht agreed that three computerized tomography (CT) scans of claimant’s lungs taken in July 2003, and COMPENSATION COMMISSION February and October 2009, exhibited generalized emphysema in both lungs, a condition commonly seen in smokers. Dr. Gumprecht EVIDENCE—ADMISSIBILITY further agreed that diacetyl was not a common cause of fixed ob- structive lung disease and he had no knowledge regarding the levels Injured Worker Need Not Submit an of diacetyl that the popcorn plant workers discussed in medical “AMA Rating Report” for Purposes of literature had been exposed to or whether they were exposed to the Determining Permanent Disability same product as claimant. Gumprecht’s testimony was contradicted by that of another physician who had been certified in and practiced The Court held that section 8.1b of the Illinois Workers’ Com- occupational and environmental medicine for 30 years. The court pensation Act, 820 Illinois Compensation Stat. 305/8.1b (2012), does noted that the admission of scientific evidence was governed by the not require an injured worker to submit an “AMA rating report” for Frye standard, which had now been codified by the Illinois Rules the purpose of determining permanent disability. The court observed of Evidence. The court concluded that Dr. Gumprecht’s causation that section 8.1b is addressed only to a physician preparing a PPD opinion was not based on a scientific methodology or principle that impairment report. The provision sets forth what a physician should had gained general acceptance in the relevant scientific community include in his or her report and establishes that the report must be and it was therefore inadmissible under Frye and Rule 702. He relied in writing. It does not contain any language that obligates either upon an editorial that had not been peer-reviewed. Dr. Gumprecht a claimant or an employer to submit a PPD impairment report. opined the mere smell of butter flavoring containing diacetyl was Moreover, indicated the appellate court, the provision contains no evidence of sufficient exposure to cause claimant’s lung disease. language limiting the Commission’s ability to award PPD benefits However, Dr. Gumprecht acknowledged on cross-examination he when no report is submitted. had very little information regarding the frequency of claimant’s Corn Belt Energy Corp. v. Illinois Workers’ Compensation Comm’n, exposure to the butter-flavoring smell, the period of time in which 2016 IL App (3d) 150311WC. claimant might have been exposed to diacetyl-containing ingredients, and which butter-flavoring ingredients used at the employer’s plant in Decatur actually contained diacetyl. Medical Testimony Found Inadmissible Under the Frye Standard and Rule 702 Durbin v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150088WC. The appellate court found that the causation opinion of claim- ant’s treating physician was inadmissible as claimant did not establish it was based on a scientific methodology or principle that JURISDICTION has gained general acceptance in the relevant scientific community. Moreover, the Commission’s determination that claimant did not Circuit Court had Jurisdiction to Decide suffer a compensable occupational disease was not against the Insurance Issue that Did Not Address manifest weight of the evidence. According to claimant, he had been Factual Issues Related to Workers’ exposed to a butter flavoring ingredient that contained the chemical Compensation Benefits or an diacetyl over a period of 20 years while working for the employer. Employer’s Obligations The evidence conflicted as to how much of the chemical had been present, however. An acknowledged smoker, claimant testified he Because a declaratory judgment action concerning the scope began to notice problems with his lungs in 2000 or 2001. Claim- of coverage in a workers’ compensation insurance policy did not ant introduced the evidence deposition of Dr. Donald Gumprecht, address factual issues related to a determination of workers’ com- taken in 2011. Dr. Gumprecht testified he was a pulmonologist pensation benefits or an employer’s obligations, and because the and had been in practice for 32 years. Over repeated objections by Commission’s expertise was not required to interpret an unambigu- the employer, Dr. Gumprecht testified that a general causal con- ous statute, the action presented a question of law that 820 ILCS nection existed between diacetyl exposure and lung disease. On 305/18 did not divest the circuit court of jurisdiction to decide. The

84 | IDC 2016 SURVEY OF LAW policy, which was issued in Indiana and contained an endorsement APPEALS for other states that excluded coverage in states requiring separate workers’ compensation insurance coverage, did not exclude cover- 30-month Limitations Period in § 19(h) age for an accident in Illinois because 820 ILCS 305/4(a)(3) (2010), is Not Tolled by Judicial Review Unless requiring an employer to insure its entire liability, did not mandate the Court Enters an Order Quashing a separate policy covering only workers’ compensation benefits due Original Award for injuries occurring in Illinois. The Commission’s original decision was entered in February Continental Western Ins. Co., Inc. v. Knox County EMS, Inc., 2016 2010. Subsequently, the decision was modified on appeal to a per- IL App (1st) 143083. manent total disability benefit award, but that award was reversed on further appeal and the original 2010 decision was reinstated. Claimant then sought additional review under section 19(h), arguing Employee Could Not Refile Claim More that the 30-month limitations period had been tolled. The appellate than 60 Days After Dismissal for Want of court disagreed. The time to file a section 19(h) petition to modify Prosecution Where Statute of Limitations permanency benefits commenced with the Commission’s decision had Also Run So As to Bar the Claim and was not tolled by appeal of the underlying Commission decision. The Commission is divested of its review jurisdiction for change of Farrar timely filed a proof of claim under the Act. The Com- disability 30 months after an award of compensation. mission dismissed her claim for want of prosecution, and she did not file a petition to reinstate her claim within 60 days pursuant to Weaver v. Illinois Workers’ Compensation Comm’n, 2016 IL App Commission Rule 9020.90(a). Instead, she filed a new claim for (4th) 150152WC. the same accident over 11 months after the Commission dismissed the first claim. When she refiled her claim, the statute of limitations on her claim had expired. The employer moved to dismiss the new Injured Worker Could Not Apply for claim, arguing that it was untimely under the Act’s statute of limita- Judgment on Medical Expenses Portion tions and on res judicata grounds. In response, Farrar argued that, of His Award While Proceedings for pursuant to section 13-217 of the Code, she had one year to refile Review Were Still Pending her claim even though the statute of limitations had expired. The Plaintiff suffered injuries in a motor vehicle accident while arbitrator granted the employer’s motion to dismiss the claim, hold- working as a truck driver for defendants. He sought workers’ ing that section 13-217 did not apply to claims under the Act that compensation benefits against defendants. An arbitrator issued an are dismissed for want of prosecution. The appellate court affirmed, award favoring plaintiff. The decision included an award of medical finding that Commission Rule 9020.90 detailed specific require- expenses, and an award of TTD benefits based on his calculation ments for a petition to reinstate, prescribed a 60-day time limitation of plaintiff’s wages. The Commission affirmed and adopted the for petitioning to reinstate, and set out a discretionary standard for arbitrator’s decision. Defendants thereafter informed plaintiff that deciding whether to reinstate. The court said that to allow the refil- they planned to petition the circuit court for judicial review of the ing of workers’ compensation claims that had been dismissed for Commission’s determination of plaintiff’s wages, but did not plan want of prosecution, beyond 60 days, up to a year after dismissal, to contest its determination of plaintiff’s medical expenses. Defen- after the statute of limitations had expired, and without a showing dants filed their petition for judicial review. Subsequently, plaintiff of any justification for refiling would render the requirements of filed a section 19(g) complaint in the circuit court, in which he Commission Rule 9020.90 meaningless. sought a judgment on the medical expense portion of the workers’ compensation award. Defendants sought to dismiss. The circuit Farrar v. Illinois Workers’ Compensation Comm’n, 2016 IL App court granted defendants’ motion to dismiss, without prejudice. (1st) 143129WC. The court concluded that section 19(g) of the Act does not provide for enforcement while any proceedings for review are pending. The

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IDC 2016 SURVEY OF LAW | 85 Survey of 2016 Tort Law Cases (Continued) court subsequently denied plaintiff’s motion for reconsideration of insurance policy, which provided for $2 million in UIM coverage. the dismissal order. The appellate court found the dismissal was Acuity contended that Decker was not allowed to make a claim for proper, that plaintiff could not apply for a judgment on the medical lost wages, past medical expenses, and future medical expenses on expenses portion of his workers’ compensation award since, at the his UIM claim. Acuity also contended that it was entitled to a set time of his application, proceedings for review were still pending. off for the full settlement that Decker received from USAA, includ- ing the $37,067.48 Decker paid Acuity from the settlement, plus Reed v. Illinois Workers’ Compensation Comm’n, 2016 IL App the full amount paid for the workers’ compensation claim. Acuity, (1st) 130681. therefore, sought a total set off of $400,942. Decker contended that Acuity would be entitled to a set off for only $363,874.52 ($350,942 Circuit Court Jurisdiction Limited to paid in workers’ compensation benefits, plus the $50,000 settlement Reviewing the Currently Pending from Hunter, minus the $37,067.48 reimbursed to Acuity). Further, Commission Decision when the case went to arbitration on the UIM claim, Decker argued, he could seek damages for all elements of loss, subject to the set Following the Commission’s denial of benefits, the claimant off. The appellate court essentially agreed with Decker, finding appealed the matter to the circuit court which reversed the Commis- that Decker should be allowed to present all elements of loss in the sion’s denial of benefits and remanded the case back to the Com- UIM arbitration, including those elements paid through workers’ compensation. However, those elements would be subject to the mission. On remand, the Commission again affirmed the denial of set off for the amount Decker actually recovered on his workers’ benefits, and the claimant appealed the remand decision to the circuit compensation claim and on his claim against Hunter. That set off court. The circuit court entered an order finding its previous order should total $363,874.52. “was in error” and that the Commission’s initial decision should have been confirmed. The appellate court held the circuit court was not Acuity v. Decker, 2015 IL App (2d) 150192. statutorily authorized to address its previous order when the only matter before it was the remand decision from the Commission. The appellate court also held the Commission could not ignore the circuit court’s remand order finding the Commission’s decision to EMPLOYER’S LIABILITY be contrary to law. The appellate court analyzed the initial decision of the Commission and ultimately affirmed the commission’s initial CONTRIBUTION denial of benefits. Settlement was in Good Faith, Noonan v. Illinois Workers’ Compensation Comm’n, 2016 IL App Resulting in Dismissal of Contribution (1st) 152300WC. Claim Against Employer, Where Employer Agreed to Continue to Pay Benefits LIENS to Injured Worker While He Proceeded to Trial Against Defendant, Insurer that Provided Both Workers’ Recovering $64 million Judgment Compensation and UIM Coverage Allowed Set Off for All Workers’ Compensation In this complex case, Defendant, an electrical components manu- Benefits Paid facturer, contracted with an iron works company to fabricate structural steel for the expansion of its facilities. In turn, the iron works company Decker suffered personal injuries from an automobile accident subcontracted with Bayer’s employer to erect the structural steel at while working for his employer. Decker received $350,942 in work- defendant’s site. Bayer suffered serious injuries when he fell while ers’ compensation benefits from Acuity, which was the employer’s working at the site, rendering him a quadriplegic. He filed a workers insurance carrier. Decker filed suit against Hunter, who drove the compensation claim against his employer, and subsequently sued both other car involved in the collision, and who was responsible for the Defendant and the iron works company for negligence. Defendant accident. Hunter’s insurer tendered the limits of its policy, $50,000, filed a third-party claim against Bayer’s employer, contending that and Decker paid Acuity $37,067.48 from the settlement as satisfac- it had been negligent in failing to maintain a safe environment for its tion of the workers’ compensation lien. Decker then submitted a employee. Defendant sought contribution from Bayer’s employer, claim for UIM compensation under the employer’s automobile based upon the employer’s alleged negligence.

86 | IDC 2016 SURVEY OF LAW Bayer and his employer filed a motion for finding of good In reversing the appellate court on the issue of whether the em- faith settlement. Following a hearing, the circuit court granted the ployer was obligated to pay attorney fees on future medical expenses motion. The circuit court observed that under section 2 of the Con- incurred by the claimant, the supreme court noted section 5(b) of the tribution Act, when a party settled a claim in good faith against one Act provides for an equitable resolution allowing for the employer tortfeasor, the finding of good faith automatically discharged that to be reimbursed for workers’ compensation benefits paid to the tortfeasor from any liability for contribution to any other tortfeasor claimant from the tortfeasor responsible for the injuries sustained by (see 740 ILCS 100/2). a claimant. Additionally, the employer maintains the responsibility Accordingly, the circuit court dismissed the employer from the for reimbursing the claimant and his attorney for the costs and efforts suit, including the contribution claim, with prejudice. Shortly there- put forth in creating a fund from which the employer can be reim- after, Bayer settled with the iron works company, leaving Defendant bursed. Because future medical expenses constitute compensation under the Workers’ Compensation Act, the provisions of section 5(b) to go to trial. The trial court ultimately entered a judgment in favor apply. Consequently, the employer is entitled to be reimbursed from of Bayer in the amount of $64 million. Defendant filed a motion al- the recovery made by the claimant from the tortfeasor for the future leging that the circuit court had erred in dismissing the contribution medical expenses, and the employer is obligated to pay 25% of the claim because the settlement between Bayer and his employer had costs associated with the future medical treatment to the claimant not been in good faith. The circuit court denied the motion. Bayer and his attorney as attorney fees for creating the fund from which sought attorney’s fees and costs from the employer. The court granted the employer is being reimbursed. Bayer’s motion as to fees relating to future workers’ compensation payments, but denied as to costs. Both the defendant and Bayer’s Bayer v. Panduit Corp., 2016 IL 119553. employer appealed. On appeal, Defendant contended the settlement was not in Kotecki Contribution Defense Need Not Be good faith since no consideration had been given for the release. Defendant also contended that due to the sizable judgment the Pled Before the Matter is Tried to a Jury employer’s failure to waive its lien in the settlement, the employer Burhmester was severely injured by a work-related electrical would recover its entire workers’ compensation outlay, effectively shock in 2007, while employed by Keefe, the electrical subcontrac- shifting its entire liability to the defendant. The appellate court tor on a construction site where Spiess was the general contractor. disagreed, noting that the employer had agreed to waive its entire Burhmester sought workers’ compensation benefits, but also filed a workers compensation lien with respect to any pre-verdict settle- civil action against Spiess. Spiess, in turn, filed a third-party action ments and, while it was not required to do so, had agreed to continue against Keefe seeking contribution. Keefe answered that any contri- paying workers compensation benefits to Bayer until the matter was bution would be limited to the amount paid or payable in workers’ resolved against all defendants. compensation benefits pursuant to the so-calledKotecki doctrine. At The appellate court continued that under the specific facts of the the trial on his claim, Burhmester was awarded almost $535,000 by case, Bayer’s employer did indeed stand to recover all of its workers a jury. Spiess proceeded with its trial against Keefe and at the close compensation payments, but that was only because of the size of the of the evidence moved for a directed verdict, arguing that Keefe verdict. The court added that Illinois courts had consistently rejected had failed to present evidence to establish its Kotecki claim as an the notion that a large verdict after-the-fact was relevant to a good faith finding before or during trial. Moreover, that the employer had affirmative defense. Citing Lafever v. Kemlite Co., 185 Ill. 2d 380 agreed to continue workers’ compensation benefits throughout the (1998) and Robertson v. Travelers Ins. Co., 95 Ill. 2d 441 (1983), case was alone sufficient consideration for the settlement. the court held a defense under the Workers’ Compensation Act does not need to be plead before the matter is tried before a jury to be Bayer v. Panduit Corp., 2015 IL App (1st) 132252, review granted, controlling. There was no need for Keefe to place the issue before 42 N.E.3d 369, (2015). the jury by pleading an affirmative defense. Rather, the trial court could effectively address the issue by means of a posttrial motion. Moreover, the holding in LaFever that Kotecki can be raised “before Supreme Court of Illinois Reversed or after the verdict” also required the court to reject Spiess’s argu- Above-Described Bayer Case Holding the ment that Keefe was required to plead and prove its Kotecki set-off Employer was Obligated to Reimburse as an affirmative defense. Claimant for Attorneys Fees for Future Medical Services Burhmester v. Steve Spiess Construction, Inc., 2016 IL App (3d) 140794. — Continued on next page

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Under LaFever, Regardless of When EXCLUSIVE REMEDY an Employer Waives its Workers’ Compensation Lien, its Contribution Parent Corporation Paying Comp Benefits Liability is Always Capped to Subsidiary’s Employee is Immune Only at the Same Amount if Obligated to Provide Such Benefits

Cozzone sustained fatal injuries while working for a roofing Where a parent corporation paid workers’ compensation company. His estate filed a wrongful death action against the owner benefits for employees of a subsidiary, it enjoyed immunity from of the building and tenant where the fatal accident had occurred. The negligence claims under 820 ILCS 305/5(a) (2012) only if it was defendants sought contribution from the roofing company, contend- under a legal obligation to pay the benefits, held an Illinois appellate ing that Cozzone’s death was due to its negligence. In a separate court. The court indicated an entity could not choose whether to be proceeding before the Commission, the employer paid $117,539 treated like an employer or like a third party, depending on what in workers’ compensation death benefits for Cozzone’s 4-year-old appeared the most to its advantage in a particular case. Immunity and 2-year-old sons. The roofing company claimed a lien on any under § 5(a) could not, therefore, be predicated on a defendant’s third party recovery the estate might enjoy against the owner of payment of workers’ compensation unless the defendant was under the building and the tenant. The estate settled with the defendants some legal obligation to pay. The court added that here, the parent for $745,000. As part of the settlement, the defendants assigned to corporation’s “evidence” was limited to a conclusory affidavit. It Cozzone’s family the rights the defendants had against the roofing should have contained facts that were admissible in evidence. company under the Illinois Joint Tortfeasor Contribution Act. Prior Burge v. Exelon Generation Co., LLC, 2015 IL App (2d) 141090. to the contribution jury trial, a judge ruled that the settlement with defendants had been good faith and the judge approved a contingency fee for the estate’s attorneys. The judge ordered the parties to deposit Exclusive Remedy Barred Case in Spite of $117,539 of the settlement in escrow, pending trial. The employer Fact that Worker Contracted Mesothelioma then stopped paying the weekly death benefits to the two sons. After Statute of Limitations Had Run The roofing company lost the contribution case and waived its lien. The estate objected, conceding that under LaFever v. Kemlite The exclusive remedy provisions of the Illinois Workers’ Co., 185 Ill. 2d 380 (1998), an employer could do this, but the estate Compensation Act and the Illinois Workers’ Occupational Diseases argued that LeFever applied only when the tort case and the contri- Act (collectively the Acts) bar an employee’s cause of action (and bution claim had been tried together. The trial court disagreed and that of his or her estate) against an employer to recover damages found the lien waiver had been effective to cut off any additional for a disease resulting from asbestos exposure that arose from the liability on the roofing company’s part. employment even though no compensation was ever available under The appellate court affirmed. It indicated there was no sound the Act since the employee’s injury or disease did not manifest until reason to deviate from LaFever just because, as here, the employer’s after the expiration of the applicable statutes of limitations, held a liability for contribution was determined after the wrongful death ac- divided Supreme Court of Illinois. With its decision, the divided tion had been settled. Under no circumstances could the employer’s Court reversed a decision by a lower appellate court. The majority of maximum contribution liability exceed the amount of its workers’ the Supreme Court indicated that the employee’s exclusive remedy compensation obligation. Regardless of when an employer waives for workplace injuries was inside the Act in spite of limitations on its workers’ compensation lien, its contribution liability is always the amount and type of recovery allowed thereunder. Equal protec- capped at the same amount. tion under Illinois Const. art. I, § 2 and the special legislation bar in Cozzone v. Garda GL Great Lakes, Inc., 2016 IL App (1st) 151479. Illinois Const. art. IV, § 13 were not violated because no “categorical” class was denied a right to seek benefits.

Folta v. Ferro Engineering, 2015 IL 118070.

88 | IDC 2016 SURVEY OF LAW Acceptance of Comp Benefits is an he never consented to perform the duties of a crane operator. The Election Barring Intentional Tort Action court noted that plaintiff failed to cite any authority for her novel Against Employer proposition. The court said that the essential facts in the case were undisputed and capable of only one reasonable inference, that the Where a paramedic trainee, who sustained injuries while par- deceased worker was the defendant’s borrowed employee. In the ticipating in a training program, filed suit against his employer and absence of any genuine issue of material fact, the defendant was others alleging an intentional tort, but later sought and received entitled to summary judgment as a matter of law. workers’ compensation benefits for the injury, his acceptance of Leon v. S & S International, Inc., 2016 IL App (1st) 141405-U. benefits operated as an election and barred any recovery in the in- tentional tort action, held an Illinois appellate court. He argued that the defendants intentionally injured him by forcing him to engage in RETALIATORY DISCHARGE rigorous physical exercise with minimal water breaks that resulted in dehydration and acute kidney failure. Citing Collier v. Wagner Plaintiff Could Not Recover Where He Castings Co., 81 Ill. 2d 229 (1980), the court said collecting workers’ Presented No Evidence that the compensation benefits for an injury was inconsistent with a common Employer’s Reason for Termination— law suit alleging the injury was the result of an employer’s (or a Expiration of FMLA Leave had Expired— co-employee’s) intentional conduct. and that the Employer’s Policy had been Locasto v. City of Chicago, 2016 IL App (1st) 151369. Applied Differently to Others

The appellate court found the trial court properly granted a Estate of Borrowed Employee Could Not summary judgment in favor of the defendant on the plaintiff’s claim Maintain a Wrongful Death Action Against of retaliatory discharge where the plaintiff failed to establish a mate- Borrowing Corporation rial issue of fact concerning whether his employment termination was in retaliation for filing a workers’ compensation claim against The worker was employed by a staffing company that provided the defendant. The court acknowledged that it was undisputed that the plaintiff had been employed by the county prior to his injury, machine operators to perform work for other companies. The de- that the plaintiff exercised his rights under the Act, and that he had fendant corporation was in the business of supplying stainless steel been discharged. The court noted that the county cited its policy as sheets, plates, coils and other structural shapes of steel to other the basis for terminating the plaintiff’s employment after his leave companies. While working at defendant’s warehouse, the worker under the Family Medical Leave Act expired. Under that policy, suffered fatal injuries when the controls of the overhead crane he the county provided injured workers with a maximum of 12 weeks was operating failed to work properly, and he was crushed by a load of unpaid leave, pursuant to the Family Medical Leave Act. With of steel sheets. On behalf of the worker’s surviving dependents, respect to workers who could not return to work at the end of the plaintiff filed a negligence action against defendant. Defendant 12-week period, the policy essentially placed them on an “inactive” contended that the worker was a borrowed servant and that plain- status in which they would not be entitled to job restoration, but in tiff’s sole remedy was under the Workers’ Compensation Act. The which they would be considered “in good standing.” If they later appellate court said that whether an employee is a loaned employee recovered to a degree such that they could return to work, they could is usually a question of fact, but where the facts are undisputed and apply for an open position. In order to defeat the county’s motion for capable of one inference, the question becomes one of law. Plain- summary judgment, plaintiff was required to present some evidence tiff did not contest the defendant’s right to control the work. She from which a jury could find that the county’s termination of him was motivated by his seeking benefits under the Act. Plaintiff argued contended, however, that summary judgment for the defendant was that the county had not established a valid business reason for its improper because the evidence did not establish that the worker had policy. The court said that was the wrong question; that the focus consented to his employment by the defendant. Plaintiff essentially on the causation issue was whether the employer had an improper argued that the deceased worker’s consent to employment by the motivation in terminating the plaintiff. Whether there is a business defendant was limited to his duties as a forklift operator and that — Continued on next page

IDC 2016 SURVEY OF LAW | 89 Survey of 2016 Tort Law Cases (Continued) purpose that prevented the employer from utilizing an alternative his attorney to reject the settlement, but that his attorney signed policy that would not have resulted in the plaintiff’s termination did the settlement agreement anyway. The defendant-employer and its not create a genuine issue of material fact with respect to the causa- insurance company contended they were not necessary parties, but tion issue. The court concluded that plaintiff had offered no evidence the circuit court denied their motion for judgment on the pleadings. It to contradict the valid reason for his termination, no evidence that entered judgment in favor of the plaintiff and vacated the settlement the policy in question was applied differently to other employees, agreement. The appellate court affirmed. While neither the employer and no evidence that the policy was adopted for retaliatory purposes. nor the insurance company had been accused of any wrongdoing, Under these facts, the circuit court properly granted the county’s they were necessary parties. The court said a review of the record motion for summary judgment. indicated the attorney had admitted the signature on the settlement agreement was a forgery. The court said the admittance that plaintiff’s Hand v. County of Randolph, 2016 IL App (5th) 150261-U. signature was forged established the settlement entered into between plaintiff and these defendants was procured by fraud.

SETTLEMENT AND WAIVER Harris v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 142782-U. General Contractor May Not Take Advantage of Settlement Agreement About the Authors it Did Not Sign

R. Mark Cosimini is a partner in Rusin & Maciorowski, Where a worker settled his workers’ compensation claim and Ltd.’s Workers’ Compensation Department. He has been signed a settlement agreement that released his direct employer and with the firm since 1997 and is the managing partner in the a purported general contractor from liability for any claims arising firm’s Champaign office. Mr. Cosimini is currently serving out of the worker’s work-related accident, the worker could never- as a member of the IDC Board of Directors and has served on the Workers’ Compensation Section Council for the theless pursue a civil action against the purported contractor where ISBA. He has lectured at legal seminars and he frequently (a) the settlement agreement indicated that all issues, including speaks with employers on issues relating to Workers’ Compensation matters. the worker’s employment status, were in dispute, (b) the worker’s employer instructed its attorney to include not only the employer, Howard L. Huntington is a partner at Bullaro & Carton, P.C. in Chicago. He focuses his practice on construction, product liability, but the general contractor, in the release language of the settlement commercial, business, public entity, civil rights, and trans- agreement, and (c) no one signed the settlement agreement on be- portation litigation. He has defended a wide variety of half of the purported general contractor. The court reasoned that no high-stakes matters in Illinois and Indiana. He serves on workers’ compensation claim had been filed against the contractor the IDC Local Government Committee and is a member of various other associations, including Defense Trial Counsel and nothing in the record indicated any employment relationship of Indiana. Mr. Huntington has defended municipalities existed between the worker and the contractor. and public entities in Title VII discrimination cases, Section 1983 public employee cases, employment contract, and other matters in both Illinois Marquez v. Martorina Family, LLC, 2016 IL App (1st) 153233. and Indiana. He received a B.A. in political science from the University of Illinois at Urbana-Champaign and his J.D. from Chicago-Kent College of Law. He is AV rated by Martindale-Hubbell.

Settlement Agreement was Procured by R. Howard Jump of Jump & Associates, P.C. practices Fraud Where Injured Employee’s in all areas of insurance defense and coverage at the trial and appellate levels. He is a past president of the Illinois Signature was Forged Association of Defense Trial Counsel. He is a long time memberf o the IDC’s Insurance Law Committee and served The employee, along with defendant-employer and its insurance as its Board Liaison. He has been a contributing author of company, allegedly entered into a settlement agreement to resolve articles on insurance coverage issues for the IDC Quarterly and newslet- plaintiff’s workers’ compensation claims. In December 2009, the ters for the Insurance Law Committee. He received the IDC’s Distinguished Member Award in 2008. Mr. Jump is also a member of the American, Illinois Commission approved the settlement. One year later, plaintiff filed and Chicago Bar Associations, the Defense Research Institute and the As- a declaratory judgment action seeking to set aside the settlement sociation of Defense Trial Attorneys. on the basis of fraud. Specifically, plaintiff alleged he informed

90 | IDC 2016 SURVEY OF LAW Zeke N. Katz is an associate attorney at HeplerBroom Kenneth F. Werts is a member of the firm of Craig & LLC. Mr Katz graduated from Colgate University in 2006 Craig, LLC in Mt. Vernon. Mr. Werts focuses his practice with a Bachelor of Arts degree in Philosophy & Religion. on workers’ compensation law; black lung; occupational He received his J.D. from Chicago-Kent College of Law in disease law; and personal injury litigation. He received 2014. He is admitted to practice in Illinois. He focuses his his undergraduate degree from the University of Illinois practice in the areas of medical malpractice and insurance and his law degree from Southern Illinois University. defense. He is a member of the American Bar Association, Prior to becoming the IDC President in 2010, Mr. Werts Illinois State Bar Association and Chicago Bar Association. has served on the IDC Workers’ Compensation Committee, Employ- ment Law Committee, and as a member of the Board of Directors. He Tara W. Kuchar is a litigation attorney with Hepler- is a member of the Jefferson County, Illinois State and American Bar Broom LLC. Ms. Kuchar’s practice focuses on defending Associations; Defense Research Institute; Association of Defense Trial At- healthcare providers in medical malpractice and nursing torneys; and the National Association of Railroad Trial Counsel. home liability cases. Ms. Kuchar practices in Missouri and Illinois state courts, as well as the U.S. District Court for the Eastern District of Missouri.

Erica S. Longfield is an associate attorney with Swanson Martin & Bell, LLP in Chicago, Illinois. Her practice is fo- cused in the areas of toxic tort litigation, asbestos litigation and products liability, representing the interests of large tort law committee corporations and insurance carriers in the defense and management of lawsuits in preparation for and at trial. N. Drew Kemp, Chair Jaime L. Padgett is an associate at Segal McCambrige Thompson Coburn LLP, Chicago Singer & Mahoney, Ltd. She concentrates her practice on 618-277-4700 defending products liability, premises liability, construc- [email protected] tion, and general litigation actions. Ms. Padgett received her Bachelor’s degree from Dartmouth College and her J.D. from Notre Dame Law School where she was Client Counseling competition champion, on the Moot Court Howard L. Huntington, Vice Chair team, and selected as Editor-in-Chief of the Journal of Law, Ethics, and Bullaro & Carton, P.C., Chicago Public Policy. 312-831-1000 Cecil E. Porter, III, an associate at Litchfield Cavo LLP, [email protected] focuses his practice in the areas of construction litigation, toxic tort litigation, commercial litigation, employers’ liabil- ity, contractual disputes, auto liability, premises liability, MEMBERS and workers’ compensation. He has served as first and Lindsay Drecoll Brown Cassiday Schade LLP second chair of jury trials to verdict in private practice and while serving as a prosecutor. He has also served R. Mark Cosimini Rusin & Maciorowski, Ltd. as first chair of many bench trials, arbitration hearings, Dan T. Corbett O’Halloran Kosoff Geitner & Cook, LLC and workers’ compensation appeals. Mr. Porter was listed as one of Illinois’ Bret Franco Kopon Airdo, LLC Super Lawyers Rising Stars, a select designation only given to 2.5% of Mitch M. Gilfillan Quinn Johnston Henderson the total lawyers in Illinois, from 2011 through 2015. He was also selected Pretorius and Cerulo as an Emerging Lawyer in the 2015 and 2016 listing by Leading Lawyers magazine. Heather L. Keil O’Hagan LLC Michael T. Kokal Heyl, Royster, Voelker & Allen, P.C. Stephanie Rifkind focuses her practice at Swanson, Erica S. Longfield Swanson, Martin & Bell, LLP Martin & Bell, LLP primarily on asbestos defense litigation, R. Mark Mifflin Giffin, Winning, Cohen & Bodewes, P.C. particularly in Madison County and Cook County, Illinois. Teresa A. Minnich Robbins Salomon & Patt, Ltd. Ms. Rifkind manages high-volume caseloads for multiple Thomas L. O’Carroll Hinshaw & Culbertson LLP clients in both premises and products-based asbestos matters. She defends industrial, commercial and retail Gregory W. Odom HeplerBroom LLC premises defendants as well as manufacturer, supplier Jaime L. Padgett Segal McCambridge Singer & Mahoney, Ltd. and retailer defendants for a wide range of product categories including Cecil E. Porter Litchfield Cavo LLP automotive, aircraft, HVAC equipment and related insulation products, Scott D. Stephenson Litchfield Cavo LLP construction products, consumer appliances and industrial pumps.

IDC 2016 SURVEY OF LAW | 91 Survey of Law Index of 2016 Cases

CIVIL PRACTICE LAW Berke v. Manilow, 2016 IL App (1st) 150397...... 11 BMO Harris Bank, N.A. v. K & K Holdings, LLC, 2016 IL App (2d) 150923...... 10 Brennan v. Travelers Home and Marine Ins. Co., 2016 IL App (1st) 152830...... 10 Colagrossi v. Royal Bank of Scotland, 2016 IL App (1st) 142216...... 10 Decker v. Union Pacific R.R. Co., 2016 IL App (5th) 150116...... 9 Kakos v. Butler, 2016 IL 120377...... 9 KNM Holdings, Inc. v. James, 2016 IL App (1st) 143008...... 11 McChristian v. Brink, 2016 IL App (1st) 152674...... 9

CONSTRUCTION LAW AUI Construction Group, LLC v. Vaessen, 2016 IL App (2d) 160009...... 13 Board of Managers of the Film Exchange Lofts Condominium Ass’n v. Fitzgerald Associates Architects, P.C., 2016 IL App (1st) 113508-U...... 12 Board of Managers of Park Point at Wheeling Condominium Ass’n v. Park Point at Wheeling, LLC, 2015 IL App (1st) 123452...... 12 Board of Managers of the 1120 Club Condominium Ass’n v. 1120 Club, LLC, 2016 IL App (1st) 143849...... 14 Burhmester v. Steve Spiess Construction, Inc., 2016 IL App (3d) 140794...... 15 Carney v. Union Pacific R.R. Co., 2016 IL 118984...... 17 Christopher B. Burke Engineering, Ltd. v. Heritage Bank of Central Illinois, 2015 IL 118995...... 13 Father & Sons Home Improvement II, Inc. v. Stuart, 2016 IL App (1st) 143666...... 13 Hecktman v. Pacific Indemnity Co., 2016 IL App (1st) 151459...... 14 Larson v. Ephraim, 2016 IL App (1st) 151223-U...... 16 Pekin Insurance Co. v. Designed Equipment Acquisition Corp., 2016 IL App (1st) 151689...... 16 Pepper Construction Co. v. Palmolive Tower Condominiums, LLC, 2016 IL App (1st) 142754...... 15 Wojcik v. IHC Construction Companies, LLC, 2016 IL App (1st) 152462-U...... 17

EMPLOYMENT LAW Brown v. Smith, 827 F.3d 609 (7th Cir. 2016)...... 24 Cook County Sheriff’s Office v. Cook County Comm’n on Human Rights, 2016 IL App (1st) 150718...... 27 Dunderdale v. United Airlines, Inc. 807 F.3d 849 (7th Cir. 2015)...... 23 Ernst v. City of Chicago, 837 F.3d 788 (7th Cir. 2016)...... 20 Kreczko v. Triangle Package Machinery Co., 2016 IL App (1st) 151762...... 26 Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016)...... 25 Lord v. High Voltage Software, Inc., 839 F.3d 556 (7th Cir. 2016)...... 20 Mendez v. Town of Cicero, 2016 IL App (1st) 150791...... 24 Nevada v. U.S. Dep’t of Labor, No. 4:16-cv-00731, 2016 WL 6879615 (E.D. Tex. Nov. 22, 2016)...... 28 Ohle v. Neiman Marcus Group, 2016 IL App (1st) 141994...... 26 Ortiz v. Werner Enterprises, Inc., 834 F.3d 760 (7th Cir. 2016)...... 22 Reed v. Getco, LLC, 2016 IL App (1st) 151801...... 24 The Trustees of Columbia University in the City of New York and Graduate Workers of Columbia – GWC, UAW, 364 NLRB No. 90 (2016)...... 21 (Continued on page 94)

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Volling v. Kurtz Paramedic Services, Inc., 840 F.3d 378 (7th Cir. 2016)...... 23 Vulpitta v. Walsh Construction Co., 2016 IL App (1st) 152203...... 27

INSURANCE LAW Adams v. Employers Ins. Co. of Wausau, 2016 IL App (3d) 150418...... 46 Allstate Insurance Co. v. Mack, 2016 IL App (1st) 141171...... 40 Altom Transport, Inc. v. Westchester Fire Ins. Co., 823 F.3d 416 (7th Cir. 2016)...... 35 AMCO Ins. Co. v. Erie Insurance Exchange, 2016 IL App (1st) 142660...... 47 American Alternative Ins. Corp. v. Metro Paramedic Services, Inc., 829 F.3d 509 (7th Cir. 2016)...... 32 Auto-Owners Ins. Co. v. Konow, 2016 IL App (2d) 150860...... 45 Bozek v. Erie Ins. Group, 2015 IL App (2d) 150155...... 35 Cincinnati Ins. Co. v. Chapman, 2016 IL App (1st) 150919...... 41 Cincinnati Ins. Co. v. Estate of Chee, 826 F.3d 433 (7th Cir. 2016)...... 36 Cincinnati Ins. Co. v. H.D. Smith, L.L.C., 829 F.3d 771 (7th Cir. 2016)...... 33 Continental Western Insurance Co., Inc. v. Knox County EMS, Inc., 2016 IL App (1st) 143083...... 42 Country Mutual Ins. Co. v. Dahms, 2016 IL App (1st) 141392...... 33 Country Preferred Insurance Co. v. Whitehead, 2016 IL App (3d) 150080...... 38 DeStefano v. Farmers Auto. Ins. Ass’n., 2016 IL App (5th) 150325...... 39 Fayezi v. Illinois Cas. Co., 2016 IL App (1st) 150873...... 41 FHP Tectonics Corp. v. American Home Assurance Co., 2016 IL App (1st) 130291...... 36 First Mercury Ins. Co. v. Nationwide Security Services, Inc., 2016 IL App (1st) 143924...... 40 Goldstein v. Grinnell Select Ins. Co., 2016 IL App (1st) 140317...... 39 Hartford Cas. Ins. Co. v. Karlin, Fleisher & Flalkenberg, LLC, 822 F.3d 358 (7th Cir. 2016)...... 32 Harwell v. Fireman’s Fund Ins. Co. of Ohio, 2016 IL App (1st) 152036...... 47 Illinois Cas. Co. v. West Dundee China Palace Restaurant, Inc., 2015 IL App (2d) 150016...... 42 Illinois Emcasco Ins. Co. v. Tufano, 2016 IL App (1st) 151196...... 39 Illinois Mun. League Risk Mgmt. Ass’n v. City of Genoa, 2016 IL App (4th) 150550...... 31 Illinois Municipal League Risk Mgmt. Ass’n v. State Farm Fire & Casualty Co., 2016 IL App (1st) 143336...... 36 Independent Trust Corp. v. Kansas Bankers Surety Co., 2016 IL App (1st) 143161...... 48 LM Insurance Corp. v. B&R Insurance Partners, LLC, 2016 IL App (1st) 151011...... 43 MemberSelect Ins. Co. v. Luz, 2016 IL App (1st) 141947...... 37 Pekin Insurance Co. v. Designed Equipment Acquisition Corp., 2016 IL App (1st) 151689...... 35 Pekin Insurance Co. v. Illinois Cement Co., LLC, 2016 IL App (3d) 140469...... 46 Phusion Projects, Inc. v. Selective Ins. Co. of South Carolina, 2015 IL App (1st) 150172...... 34 Robert R. McCormick Foundation v. Arthur J. Gallagher Risk Mgmt. Services, Inc., 2016 IL App (2d) 150303...... 43 Safeway Ins. Co. v. Hadary, 2016 IL App (1st) 132554-B...... 37 Scottsdale Ins. Co. v. Lakeside Community Committee, 2016 IL App (1st) 141845...... 43 Skaperdas v. Country Casualty Ins. Co., 2015 IL 117021...... 43 Skolnik v. Allied Prop. & Cas. Ins. Co., 2015 IL App (1st) 142438...... 34 State Farm Mutual Auto. Ins. Co. v. Burke, 2016 IL App (2d) 150462...... 37 State Farm Mutual Automobile Insurance Co. v. Loop Operations, 2016 IL App (1st) 151545...... 45 Travelers Personal Ins. Co. v. Edwards, 2016 IL App (1st) 141595...... 31 Trotter v. Harleysville Insurance Co., 821 F.3d 916 (7th Cir. 2016)...... 40 Westfield Ins. Co. v. West Van Buren, LLC, 2016 IL App (1st) 140862...... 31 Zagorski v. Allstate Ins. Co., 2016 IL App (5th) 140056...... 47 (Continued on page 96)

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LOCAL GOVERNMENT LAW Accel Entertainment Gaming, LLC v. Village of Elmwood Park, 2015 IL App (1st) 143822 and Midwest Gaming and Entertainment, LLC v. County of Cook, 2015 IL App (1st) 142786...... 55 Barr v. Frausto, 2016 IL App (3d) 150014...... 54 Burns v. City of Chicago, 2016 IL App (1st) 151925...... 50 Coleman v. East Joliet Fire Protection District, 2016 IL 117952...... 52 Fraternal Order of Police, Chicago Lodge No. 7 v. City of Chicago, 2016 IL App (1st) 143884...... 57 Hampton v. Metropolitan Water Reclamation Dist. of Greater Chicago, 2016 IL 119861...... 58 Hillmann v. City of Chicago, 834 F.3d 787 (7th Cir. 2016)...... 52 Jackson v. Village of Grayslake, No. 15 C 2661, 2016 U.S. Dist. LEXIS 109373, at *21 (N.D. Ill. Aug. 16, 2016), dismissing with prejudice at 2016 U.S. Dist. LEXIS 122749 (N.D. Ill. Sep. 9, 2016)...... 57 Kristofek v. Village of Orland Hills, 832 F.3d 785 (7th Cir. 2016)...... 54 Lorenc v. Forest Preserve District of Will County, 2016 IL App (3d) 150424...... 50 McGrath v. City of Kankakee, 2016 IL App (3d) 140523...... 56 Mitchell v. Village of Barrington, 2016 IL App (1st) 153094...... 54 Rosado v. Gonzalez, 832 F.3d 714 (7th Cir. 2016)...... 51

TORT LAW ABF Freight System, Inc. v. Fretts, 2015 IL App (3d) 130663...... 80 ABF Freight Sys. v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 141306WC...... 77 Acuity v. Decker, 2015 IL App (2d) 150192...... 86 Adcock v. Illinois Workers’ Compensation Comm’n, 2015 IL App (2d) 130884WC...... 73 Allenbaugh v. Illinois Workers’ Compensation Comm’n, 2016 IL App (3d) 150284WC...... 74 Atchley v. University of Chicago Medical Center, 2016 IL App (1st) 152481...... 64 Bayer v. Panduit Corp., 2015 IL App (1st) 132252, review granted, 42 N.E.3d 369, (2015)...... 86 Bayer v. Panduit Corp., 2016 IL 119553...... 87 Bolingbrook Police Dep’t v. Illinois Workers’ Compensation Comm’n, 2015 IL App (3d) 130869WC...... 73 Buckel v. Tube Pro Inc., 2016 IL App (1st) 150427-U...... 60 Bulduk v. Walgreen Co., 2015 IL App (1st) 150166-B...... 65 Burge v. Exelon Generation Co., LLC, 2015 IL App (2d) 141090...... 88 Burhmester v. Steve Spiess Constr., Inc., 2016 IL App (3d) 140794...... 87 Burkhart v. Wolf Motors of Naperville, Inc., 2016 IL App (2d) 151053...... 61 Cady v. Illinois Workers’ Compensation Comm’n, 2016 IL App (3d) 140807WC-U...... 76 Centeno v. Illinois Workers’ Compensation Comm’n, 2016 IL App (2d) 150575WC-U...... 81 Chlada v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 150122WC...... 83 City of Chicago v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 142637WC-U...... 81 Continental Tire of the Americas, LLC v. Illinois Workers’ Compensation Comm’n, 2015 IL App (5th) 140445WC...... 83 Cont’l Western Ins. Co., Inc., v. Knox County EMS, Inc., 2016 IL App (1st) 143083...... 84 Corn Belt Energy Corp. v. Illinois Workers’ Compensation Comm’n, 2016 IL App (3d) 150311WC...... 84 Cozzone v. Garda GL Great Lakes, Inc., 2016 IL App (1st) 151479...... 88 Darin v. Illinois Workers’ Compensation Comm’n, 2015 IL App (3d) 140536WC-U...... 76 Dorsey v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 143044WC...... 82 (Continued on page 98)

96 | IDC 2016 SURVEY OF LAW IDC 2016 SURVEY OF LAW | 97 2016 Survey of Law Index (Continued)

Dunteman v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150543WC...... 77 Durbin v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150088WC...... 84 Elward v. Electrolux Home Products, Inc., No. 15 C 9882, 2016 WL 5792391 (N.D. Ill. Oct. 4, 2016)...... 60 Esquinca v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 150706WC...... 79 Farrar v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 143129WC...... 85 Folta v. Ferro Eng’g, 2015 IL 118070...... 88 Freeburg Cmty. Sch. Dist. #70 v. Illinois Workers’ Compensation Comm’n, 2016 IL App (5th) 140535WC-U...... 78 Hagan v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 143745WC-U...... 79 Hall v. Flannery, 840 F.3d 922 (7th Cir. 2016)...... 71 Hand v. Cnty. of Randolph, 2016 IL App (5th) 150261-U...... 89 Hanna v. Creative Designers, Inc., 2016 IL App (1st) 143727...... 67 Harris v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 142782-U...... 90 Illinois Workers’ Compensation Comm’n v. Anderson, 2015 IL App (2d) 141153WC-U...... 76 In re Estate of Case v. Hanneman, 2016 IL App (2d) 151147...... 68 Jackson Park Hosp. v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 142431WC...... 83 Jones v. Live Nation Entertainment, Inc., 2016 IL App (1st) 152923...... 68 Klaine v. Southern Ill. Hosp. Serv., 2016 IL 118217...... 72 Klemm Tank Lines v. Petrak, 2015 IL App (1st) 140352WC-U...... 79 Klesowitch v. Smith, 2016 IL App (1st) 150414...... 67 KVF Quad Corp. v. Illinois Workers’ Compensation Comm’n, 2016 IL App (3d) 150139WC-U...... 75 Leon v. S & S Int’l, Inc., 2016 IL App (1st) 141405-U...... 89 Libolt v. Wiener Circle, Inc., 2016 IL App (1st) 150118...... 66 Locasto v. City of Chicago, 2016 IL App (1st) 151369...... 89 Marquez v. Martorina Family, LLC, 2016 IL App (1st) 153233...... 90 McChristian v. Brink, 2016 IL App (1st) 152674...... 72 McLean Cnty. Sch. Dist., Unit 5 v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150248WC-U...... 75 Mizyed v. Palos Community Hosp., 2016 IL App (1st) 142790...... 69 Moon v. Rhode, 2016 IL 119572...... 71 Moran v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 151366WC-U...... 78 Neumann v. Borg-Warner Morse Tec LLC, 168 F. Supp. 3d 1116 (N.D.Ill. 2016)...... 65 Noonan v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 152300WC...... 86 Oliver v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 143836WC...... 82 Peacock v. Waldeck, 2016 IL App (2d) 151043...... 67 Reed v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 130681...... 85 S&C Elec. Co. v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 141057WC...... 74 Schweihs v. Chase Home Finance, LLC, 2015 IL App (1st) 140683, affirmed by 2016 IL 120041...... 63 Sensational Four, Inc. v. Tri-Par Die and Mold Corp., 2016 IL App (2d) 150468...... 61 Smith v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150059WC-U...... 80 Sondag v. Pneumo Abex Corporation, 2016 IL App (4th) 140918...... 65 Suarez v. W.M. Barr & Co., Inc., 842 F.3d 513 (7th Cir. 2016)...... 62 United Airlines, Inc. v. Illinois Workers’ Compensation Comm’n, 2016 IL App (1st) 151693WC...... 74 Villaseñor v. Sterling Brands, LLC, 2016 IL App (1st) 143387-U...... 77 Weaver v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150152WC...... 84 Williams v. Illinois Workers’ Compensation Comm’n, 2016 IL App (4th) 150126WC-U...... 78 Yarbrough v. Northwestern Mem. Hosp., 2016 IL App (1st) 141585...... 70

98 | IDC 2016 SURVEY OF LAW IDC 2016 SURVEY OF LAW | 99 Survey of Law Index of Advertisers

Brown & James, P.C...... Inside Front Cover Cremer, Spina, Shaughnessy, Jansen + Siegert, LLC...... 100 ESI (Engineering Systems Inc.)...... 95 Giffin, Winning, Cohen, & Bodewes, P.C...... Inside Front Cover HeplerBroom LLC...... Back Cover Heyl, Royster, Voelker & Allen, P.C...... Inside Back Cover Johnson & Bell, Ltd...... 6 Jump & Associates, P.C...... 7 McKenna Storer...... 2 Minnesota Lawyers Mutual...... 99 Pohlman USA...... 8 RGL Forensics...... 97 S-E-A ...... 3 SmithAmundsen LLC...... 93

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