Plaintiffs win big in Ready: the Supreme Court holds that good-faith settling tortfeasors can't be included in apportioning fault after verdicts to determine joint and several liability

Illinois Bar Journal, Feb, 2009 by Helen Gunnarsson

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For some plaintiffs' lawyers in 2008, the Illinois Supreme Court saved the best for last.

Twenty-two years to the day after the state tort reform legislation package of 1986 became effective, the court decided Ready v United/Goedecke Services, Inc, 2008 WL 5046833 (111 Sup Ct 2008). In a plurality opinion, the court held that 735 ILCS 2-1117, which provides for apportionment of fault among defendants sued to determine joint and several liability, does not apply to good-faith settling tortfeasors who have been dismissed from a lawsuit.

The facts

Michael Ready, a maintenance mechanic at a Joliet power plant, died in a workplace accident in 1999. His wife, as administrator of his estate, brought a wrongful death action that eventually included three defendants: Ready's employer, Midwest Generation, LLC; BMW Constructors, Inc., the general contractor of a project on which Ready was working at his death; and a subcontractor, United/Goedecke Services, Inc.

The plaintiff reached settlement agreements with BMW and Midwest, but not with United. United did not object to the settlements, which totaled a little over $1 million, and the trial court found that those settlements were in good faith.

The case proceeded to trial against United alone, whom the trial court did not permit to present any evidence regarding the conduct of BMW or Midwest. The jury found against United on the plaintiff's negligence allegations and awarded Ready's estate damages of $14.23 million. Under 735 ILCS 5/2-1117, the trial court found United jointly and severally liable after offsetting the verdict for Ready's comparative negligence of 35 percent and the settlement amounts that BMW and Midwest had paid, yielding a final liability to United of $8.137 million.

United appealed, arguing that the trial court should have included the settling defendants on the verdict form so that the jury could determine their share of fault for the accident. Had the jury been asked to do so, United argued, it might have set United's share of fault at less than 25 percent, which would have made United only severally liable under section 2-1117.

The appellate court agreed with United on that point and remanded the matter for a new trial on liability. The supreme court granted leave to appeal.

Key phrase: "defendants sued by the plaintiff"

The version of section 2-1117 that was in effect at the time of Ready's accident, before the 2003 amendment, read as follows:

Joint Liability. Except as provided in Section 2-1118, in actions on account of bodily injury or death or physical damage to property, based on negligence, or product liability based on strict tort liability, all defendants found liable are jointly and severally liable for plaintiff's past and future medical and medically related expenses. Any defendant whose fault, as determined by the trier of fact, is less than 25% of the total fault attributable to the plaintiff, the defendants sued by the plaintiff, and any third party defendant who could have been sued by the plaintiff, shall be severally liable for all other damages. Any defendant whose fault, as determined by the trier of fact, is 25% or greater of the total fault attributable to the plaintiff, the defendants sued by the plaintiff, and any third party defendants who could have been sued by the plaintiff, shall be jointly and severally liable for all other damages.

The statute's current version excludes the plaintiff's employer from the third-party defendants subject to a finding of fault.

The supreme court zeroed in on the phrase "defendants sued by the plaintiff." It found that whether settling defendants, such as BMW and Midwest, fell within that phrase's meaning was ambiguous.

After examining case law from the appellate court holding that settling defendants were not to be included in the apportionment of fault and noting the legislature's failure to amend the statute in the wake of those decisions, the court determined that the legislature had accepted that interpretation of the section. The court therefore held that good-faith settling tortfeasors are not to be included in apportioning fault after verdicts to determine joint and several liability.

Raising the stakes for settlement

Regular appellate and supreme court practitioner Michael Reagan of Ottawa commented on the "dramatic" character of the decision. "Whether settled defendants should be included on verdict forms was the last remaining unresolved issue from the 1986 tort reform package. It's amazing that prominent issues like this can wait so long for a final resolution by the supreme court, but until now, the court was never presented with the opportunity to resolve this issue."

Reagan noted that "the outcome in Ready enhances the risks involved in numerous settlement scenarios. It certainly increases the risk for the nonsettling defendant." Particularly, perhaps, where the settling defendant is shallow-pocketed or judgment-proof, and the defendant who's reluctant to settle happens to have a deep pocket.