Chicago Accident Law Blog

An Illinois Uninsured Motorist policy has been interpretted by the Appellate Court as providing coverage to a child living with his mother and her fiancee under the fiancee's insurance policy in an opinion released July 25, 2008. Clayton v. Millers First Insurance Co., 2008 WL 2926874 (5-07-0061). The minor plaintiff was injured in a one car accident where the driver was uninsured and sought uninsured motorist benefits under his mother's fiancee's insurance policy. The insurance company denied coverage and a declaratory judgment action followed where the trial court granted the insurer's motion for summary judgment holding that the child did not qualify as a "family member" under the fiancee's policy. An appeal followed.

In the appeal the pertinent question was whether the minor plaintiff qualifies as a "family member" under the fiancee's policy. The policy defined "family member" as follows: "....a person related to you by blood, marriage, or adoption who is a resident of your household. This includes a ward or foster child." The plaintiff contended that the definition was ambiguous and that the term "ward" has several meanings.

The Clayton court discussed whether the term "ward" necessarily required court adjudication. The mother's fiancee was never appointed as a guardian, the minor merly lived with him along with his mother. Citing Parks v. Kownacki, 305 Ill. App. 3d 449, 711 N.E. 2d 1208 (1999), rev'd on other ground, 193 Ill. 2d 164, 737 N.E. 2d 287 (2000), the Appellate Court held: "that the term ward could be used to describe a person despite no prior adjudication of that status." Clayton, supra. The Appellate Court reversed the trial court's granting of a summary judgment and held as a matter of law that the minor was entitled to uninsurance motorist benefits under his mother's fiancee's insurance policy. Read those policies carefully there may be more there than you think!

Illinois attorneys handling Underinsured Motorist Claims should be aware that there are setoffs that the insurance companies are claiming that need to be challenged. In a typical situation, plaintiff sustains serious injuries caused by the negligence of another driver. Plaintiff settles her claim for the policy limits of $100,000 from the negligent driver's insurance company. Plaintiff makes a claim against her won insurance company for additional benefits under the underinsured motorist coverage of her own policy. Her insurance policy has limits of $300,000 for underinsurance motorist coverage. The plaintiff's insurance company will routinely seek a credit for the full $100,000 paid by the neglligent driver's insurance company, therby leaving only an additional $200,000 available to compensate the seriosly injured plaintiff.

The common fund doctrine allows a party that creates a fund from which others benefit to seek reimbursement from those other parties. Scholtens v. Schneider, 173 Ill. 2d 375, 671 N.E. 2d 657 (1996). The common fund doctrine most often appears in situations where an insurer obtains a recovery for medical expenses they paid through the plaintiff's attorney's efforts in securing the fund. However, the common fund doctrine is not limited to insurance subrogation cases. Chapman v. Kitzman, 193 Ill. 2d 560. 739 N.E. 2d 1263 (2000). The general requirements for applying the common fund doctrine are: (1) the fund for which fees are sought was created as a result of legal services performed by the plaintiff's attorney, (2) the claimant of the fund did not participate in its creation, and (3) the claimant will benefit from the fund. Taylor v. State Universities Retiremement System, 203 Ill. App. 3d 513, 560 N.E. 2d 893 (1990).

In a very interesting partial concurrence and disssent Justice Chapman addresses the intersection of the common fund doctrine and underinsured motorist benefits and concludes that: "the common-fund doctrine is applicable." James v. Western States Ins. Co., 335 Ill. App. 3d 1109, 1127, 738 N.E. 2d 37, 51(2001). Using the example above with the $100,000 settlement with negligent driver's insurance company, the underinsured motorist policy of $300,000 would receive a credit of $66,666 ($100,000 minus $33,333 in fees or $66,666), instead of the full $100,000 credit. Using this approach achieves a $33,000 additional benefit to the client.

Young v. Mory, 294 Ill. App. 3d 839, 690 N.E. 2d 1040 (1998), provides persuasive authority for this approach. In Young, the court held that the State Employees Retirement System could not claim a full offset of worker's compensation benefits paid to injured worker, but only that portion of benefits that the injured party actually received after the deduction of attorneys fees. This issue should be pressed in the trial court, and if unsuccessful, an appeal should be taken. I am hopeful that the Appellatte Court may follow the reasoning of Justice Chapman and the holding of Young and apply the common fund doctrine to undersinsured motorist claims. Why should injured parties pay attorneys fees to provide a benefit to insurance companies without requiring the companies to pay some of the freight-this is what the common fund doctrine is all about!

Tires older than 6 years old should not be used on motor vehicles since it can lead to tread separation and catastrophic failure. Since 2001 the British Rubber Manufactures Association (BRMA) have recommended: "BRMA members strongly recommend that unused tyres should not be put into service if they are over 6 years old and that all tyres should be replaced 10 years from the date of their manufacture." This is incredible since BRMA includes all the tire manufacturers who also sell in the United States. No such warnings have been given by tire manufacturers and retailers to consumers in the United States. Retailing giants in the U.S. like Walmart and Sears routinely sell tires as new in their stores that are routinely older than 6 years and sometimes as old as 17 years. This is unconscionable!

Like any other rubber product, tires have a limited service life regardless of tread depth and use. Tire age can be determined through decoding of the required DOT number printed on the side of a tire, but it is of no help to consumers because you must know the code to interpret when the tire was manufactured. Experts that I have worked with say that tire age is a silent killer because a consumer can purchase a brand new tire from a reputable retailer or outlet and have no idea that at the time of purchase the tire is already defective.

Ford Motor Company added a 6 year tire replacement recommendation, regardless of tread wear, to all 2006 owner's manuals. Finally, on June 2, 2008, the National Highway Transportation Safety Administration (NHTSA) issued a Consumer Advisory warning that aged tires, regardless of tread use, are subject to greater stress increasing the likelihood of catastrophic failure. Recent investigative reports point to corporate neglect and government inaction as the root cause of American consumers buying new tires that are defecive at the time of purchase.

Attorneys reviewing cases involoving tread separation must be alert to and agressively evaluate the age of the tire as a possible cause of the separation. Insurance industry data reflect that 84% of tire claims arise in tires over 6 years old. Securing the tire and retaining the appropriate tire safety experts are essential first steps for the attorney to take when pursuing these product liability claims. Tire manufacturers, automotive companies, and their retailers have long been aware of the dangers posed by marketing tires older than 6 years old, but have failed to warn consumers despite the deadly consequences. If tread separation occurs on a tire older than 6 years with deadly consequences, sue the bastards!

An Illinois product liability verdict against Ford Motor and Mazda Motors for defective design of driver's seat was affirmed, but the damage award of $27 million was reduced by an appellate court in Chicago on Nov. 22, 2006. On Feb. 4, 2000, decedent was a driver stopped at stoplight when he was rear ended by a drunk driver. On impact decedent's seat flattened backwards and he was ejected toward the rear of the car causing injuries that led to his death three days later.

Decedent's estate filed a product liability lawsuit in Chicago alleging that driver's seat was defectively designed with inadequate strength making it unreasonably dangerous. The driver's seat was co-designed by Ford and Mazda and was a "yielding seat" meaning that when force applied it yielded in the direction of the force. This "yielding seat" met federal safety standards. However, plaintiff's expert testified that compliance with federal safety standards does not make a seat safe. Expert testimony revealed that a "rigid seat" transfers the energy forward in a rear end collision.

Estate expert witnesses testified the a "rigid seat" was feasible and would have protected decedent from his fatal injuries. Specifically, experts opined that risk of severe to fatal injuries was 10 to 25 times greater with a "yielding seat."

Continue reading "Illinois Product Liability Verdict of $27 Million Affirmed and Reversed" »

In a Chicago wrongful death action that asserted claims for underinsured motorist benefits, the Illinois Supreme Court interpreted whether the "per person" limits of liability or the "per occurrence" limits of liability applied to family members derivative claims. The Illinois Wrongful Death Act, 740 ILCS 180/2 states: "...every such action shall be for the exclusive benefit of the surviving spouse and next of kin of such deceased person..." Illinois courts have defined "next of kin" as those blood relatives of the decedent who are in existence at the time of the decedent's death who would take the decedent's property if the decedent had died intestate. Provena v. St. Therese Medical Center, 334 Ill. App. 3d 581, 778 N.E. 2d 298 (2002).

Continue reading "Illinois Wrongful Death Coverage Limited by Supreme Court" »

An Illinois wrongful death verdict arising out of a construction accident where a scaffold collapsed was reversed by the appellate court in Chicago. The Court did rule that the defendants had waived any right to challenge the award of $14,230,000. The issue as framed by the Appellate Court:

Is a defendant who settles with the plaintiff prior to trial still a "defendant sued by the plaintiff" within the meaning of section 2-1117 of the Code of Civil Procedure (735 ILCS 5/2-1117)? If we answer this question in the affirmative, then all defendants sued by the plaintiff, including those who settled prior to trial, may be included on the jury verdict form so that the fact finder can assign each defendant their degree of fault, if any. If we answer this question in the negative, then only those defendants who remain when the case is submitted to the fact finder may be included on the verdict form.

Ready v. United, 367 Ill. App. 3d 272, 854 N.E. 758, 2006 WL 2434935 (2006).

Continue reading "Chicago Appellate Court Puts Settling Defendants on Verdict Form" »