Public Policy, 2-1117 and Settling Defendants: 1986 Revisited

By Joseph M. Eichberger Smith Amundsen

This article examines the concurring opinion by Justice Hoffman in Ready v United/Goedecke Services, Inc., 367 Ill.App. 3d 272, 854 N.E.2d758 First Dist.,2006) and reviews part of the published record from the 84^th Illinois General Assembly's debate on joint and several liability. The author of this article maintains that the public policy, crafted in 1986, carefully examined the dilemma posed by Justice Hoffman in Ready. That public policy protected plaintiffs by promoting fair settlements and protected minimally culpable defendants by discouraging unfair settlements. The Legislative Amendment to 2-1117 in July, 2003 is an effective compromise that preserves a litigant's rights, so carefully examined in 1986. Disqualifying settling defendants from the statutory fault pool is an extreme measure. By encouraging unfair settlements, minimally culpable defendants are deprived of justice.

In Ready v United/Goedecke Services, Inc. the First District Appellate Court reversed and remanded a trial court ruling excluding settling defendants-in-chief from the fault pool for determining joint and several liability. As a result of the trial court ruling, fault was assessed only against the plaintiff and a single defendant-not against the plaintiff and three defendants. Therefore, there was no issue of whether the non-settling defendant was only severally liable for the plaintiff's non-medical damages. In reversing the trial court ruling the First District Appellate Court held that:

"…a remaining defendant's culpability should be assessed relative to the culpability of all defendants, including settling defendants. Only in this manner can the intent of section 2-1117, that minimally culpable defendants be held minimally responsible, be achieved" ( Ready, p. 278, majority opinion, emphasis added)

In Justice Hoffman's succinct concurring opinion, he used a familiar fact pattern to frame the joint and several liability dilemma posed by 2-1117. Justice Hoffman applied the majority holding in Ready to a hypothetical case with two defendants-in-chief. One defendant-in-chief was well-funded but liable only for 15% of the plaintiff's $3,000,000 judgment.The other defendant-in-chief was poorly funded and liable for the remaining 85% of the plaintiff's $3,000,000 judgment.Priorto trial, the poorly-funded defendant settled for$300,000 leaving a net verdict due of $2,700,000. If settling defendants do not count in the fault pool for determining joint and several liability, then the well-funded defendant, found only 15% liable, must pay 90% of the judgment. If one holds that settling defendants count in the fault pool, then the well-funded defendant would only pay his fair share, 15% or $405,000. This means that a judgment plaintiff would collect only $705,000 of his $2,700,000 judgment. Accordingly, Justice Hoffman's concurring opinion ends:

"Any remedy for the possible inequities created by section 2-1117 lies with the General Assembly" (Ready, concurring opinion, p. 282).

The General Assembly very carefully examined the, "possible inequities" of 2-1117 and from that examination crafted and passed 2-1117 in 1986. The floor debate demonstrates the fact-finding function that the Legislature undertook when it crafted the public policy behind the statute:

"…So, the issue is, therefore, if you are with solvent defendants, the joint and several theory means nothing; but when one defendant is a deep pocket and the others are insolvent, then that one must pay all. We have changed that. We have heard from the municipalities, from the retailers, from people all across the state that we are concerned that we are minimally liable, five, ten percent liable, fifteen percent liable, and we're stuck for the whole thing. So we have said that there should be a threshold. If you are twenty-five percent liable, you are so much involved with causing that accident, so much involved with that injury, that you should respond in damages for the entire amount. But if you are less than twenty-five percent, then you should pay only your share…" (84^th General Assembly, House of Representatives Transcription debate, 139^th Legislative Day, June 30^th, 1986, pp. 8,9)

The following colloquy, between Representative Greiman and Representative Regan, captures Justice Hoffman's dilemma precisely:

Regan: "Representative, I am curious because the joint and several liability seems to be the hedge, seems to be the hub, seems to be the cause of most of the problems involving the deep pocket. Could you explain to me, please, under the new Bill, the answer to this scenario? A drunk driver doing a hundred miles an hour goes through a stop sign and he hits a truck. He hits a truck and knocks a wheel off and it hits an old guy digging in a garbage can and it disables him for life. The medical bills are anticipated to be $250,000 and the others are about $250,000 in the other part of the law suit. Can you explain to me how this Bill works…"

Greiman: " Sure, the guy who was driving a hundred miles an hour pays it all. The other guy pays nothing."

Regan: " The guy who was driving a hundred miles an hour doesn't have any insurance."

Greiman: "He still pays…Well, he can't pay if he doesn't have any, but nobody else pays anything. You see, Mr. Regan, that other defendant, that other person must be liable. He must be negligent, not just a resident of the country, not just coming from outer space. He has to be the proximate cause of the injury and as a matter of fact, there is no jury under your scenario that would find him liable at all and no jury would certainly find him more than 25 percent. Thanks for the question." (Ibid, p. 64)

Finally, the comments made by Representative Johnson, prior to voting, reflect the efforts made by the Legislature, in confronting the joint and several dilemma:

"…Outside of a Bill that would totally eliminate someone's right to recover and to turn our back on people that none of us really want to turn our back on-burn victims and brain damaged children and so forth-this Bill represents the most substantial change in our Civil Justice System that a single Legislative Body in Illinois has ever enacted or any single court decision represents. You can characterize that whatever…whatever way you want, but the bottom line is, this Bill is a major overhaul of a Civil Justice System that's lasted and served us well for 200 years. One part of me wants to vote ‘no'. On the other hand, the practical aspect of this legislative process is, you got to reach some middle ground of relieving and reaching out to serve the interests of injured people and at the same time, realizing that there is a problem. It's not perfect. It's perhaps not the very best we could do, but in light of this Session and everything we've done, it's a pretty good job, and I…I vote ‘aye'. (Representative Johnson, 139^th Legislative Day, 84^th General Assembly House of Representatives Transcription Debate, p. 80)

These excerpts from the legislative record make it clear that 1) the fact-finding function of the Legislature which lead to the 1986 statute was thorough and 2) the public policy that came from it was crafted as a compromise the extremes framed by the statute's concerns.

In 1986, defendants qualifying for the statutory fault pool were described as, " . . . the defendants sued by the plaintiff, and any third party defendant who could have been sued by the plaintiff,. . . ." After passage of the statute, two sets of potentially qualifying defendants were treated differently in the State's Appellate Courts. First, a conflict arose over whether the plaintiff's employer was a qualifying defendant. The second conflict was whether a settling defendant was a qualifying defendant. The greater the number of qualifying defendants in the statutory fault pool, the greater the chance that a judgment plaintiff would not be fully compensated. The smaller the number of qualifying defendants, the greater the chance that a minimally culpable defendant would pay 100% of the plaintiff's damages. Both extremes work an injustice and the statute was crafted to avoid them both.

In July 2003, the Illinois Legislature amended 2-1117 to specifically eliminate plaintiff's employers as qualifying defendants. By disqualifying plaintiff's employers from the statutory fault pool, the Legislature crafted an exception to the 1986 public policy and reduced the impact of the statute on judgment plaintiffs. At the same time the Legislature could easily could have addressed the other blooming Appellate Courts conflict in July 2003. It could have disqualified settling defendants from the statutory fault pool too but it chose not to do so. Disqualifying both plaintiff's employers and settling defendants would not just reduce the effect of the statute on plaintiffs, it would have all but eliminated the statute.

Plaintiff's counsel have always faced a risk in settling with any defendant prior to trial. The risk is that a plaintiff's trial evidence against the non-settling defendant(s) fails and the settlement proceeds do not fully compensate the plaintiff. This risk has always encouraged fair settlements based upon fault. Settlements based on honestly perceived fault promotes full compensation for plaintiffs and therefore, liability based upon fault, not something else.

Disqualifying non-settling defendants from the joint and several fault pool, would be a de facto voiding of the statute. A plaintiff's counsel, with decent trial evidence, would settle all defendants but one, for amounts unrelated to fault, to avoid the statute. Doing so would be virtually risk-free for a plaintiff and create an extreme now absent in our system of civil justice. Minimally culpable defendants have all the right reasons not to settle. Our system of civil justice must fairly accommodate a minimally culpable defendant by protecting his right to pay his fair share. The joint and several statute, as amended in July, 2003, promotes full compensation for plaintiffs by encouraging pre-trial settlement based on fault. It promotes the rights of the minimally culpable defendant by protecting his right not to pay more than he owes. Disqualifying non-settling defendants from the statutory fault pool deprives the minimally culpable defendant of that right.

The joint and several liability statute, passed into law in 1986, was a careful compromise. The statute crafted a balance between the right of a judgment plaintiff to be fully compensated and the right of a minimally culpable defendant to pay his fair share of damages. The 1986 version was passed after careful fact-finding and thorough debate by the Illlinois Legislature. The amendment to the statute in July, 2003 promoted the right of a judgment plaintiff to be fully compensated and the right of the minimally culpable defendant to pay only his fair share. Changing the statute by disqualifying settling defendants from the fault pool would be a de facto repeal of the statute. It would deprive the minimally culpable defendant, the one with the best reason not to settle, of the right to pay his fair share and no more. Final resolution of this issue may come from the Supreme Court which accepted the plaintiff's petition for leave to appeal on November 29, 2006.

Joseph M. Eichberger