The Appellate Strategist

The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

Join Us Wednesday for “The California Supreme Court: What to Expect in 2015″

Posted in Announcements, California

7177794150_5dcc918bbd_zOn Wednesday, April 29th at 11:00 AM Pacific/2:00 PM Eastern, Sedgwick’s Appellate Task Force will present its webinar “The California Supreme Court: What to Expect in 2015.” Highlights of the hour-long CLE presentation include:

  • Data Analytics and the Court: We’ll preview our group’s new data analytics database on the Court’s work since 2000. We’ll discuss which Court of Appeal districts are reversed most and least often; whether the Court more often reviews plaintiffs’ or defendants’ wins in each of the most common areas of the law on its docket (and how often each side’s decisions are reversed); the Court’s average time from argument to decision, and what a longer-than-average delay might mean; and the voting patterns of the individual Justices, including which Justices often vote together in close cases;
  • Personal Jurisdiction over Out-of-State Defendants: The Court will soon consider and apply recent landmark cases from the U.S. Supreme Court restricting plaintiffs’ ability to sue out-of-state defendants on claims with little or no connection to the forum. Will the California courts continue to be burdened with thousands of “litigation tourist” lawsuits in a time of tight court budgets?
  • Enforcing Limits on Healthcare Provider Liability: Can limits on healthcare provider liability be avoided by alleging a general negligence duty of care distinct from concepts of professional negligence?
  • Expanding the Scope of Asbestos Liability: A dozen years after the last domestic asbestos mine closed, will the Court double down on California’s pro-plaintiff asbestos standards by authorizing bystander suits by plaintiffs who never worked for the defendant or used the defendant’s products?
  • Arbitration of Consumer Disputes: Will the Court continue to soften its longstanding hostility to arbitration in the wake of recent U.S. Supreme Court decisions and hold that federal law preempts a state bar on arbitration clauses in consumer contracts?

For CLE details and to register for the webinar, click here.

Image courtesy of Flickr by Cliff.

Illinois Supreme Court OKs Injunctive Suit Against University Trustees

Posted in Illinois

3861458321_17bf8e63a7_zEarlier this month, the Illinois Supreme Court disposed of one of the older cases on its advisement docket. A sharply divided Court held in Leetaru v. The Board of Trustees of the University of Illinois that a former employee and graduate student at the University of Illinois could maintain a suit for injunctive relief against the Board of Trustees and an associate vice chancellor. Our detailed summary of the facts and lower court opinions in Leetaru is here. Our report on the oral argument is here.

Leetaru began in January 2011, when the plaintiff was informed by a university official that his employment would cease the following January for “budgetary and performance issues.” Six weeks before his job was scheduled to be eliminated, the plaintiff was placed on administrative leave. Once that happened, the plaintiff was allegedly barred from his office and denied access to various documents, including documents and data relating to his graduate studies, doctoral research and dissertation materials. In February 2012, the plaintiff received notice that a formal research misconduct complaint had been filed against him. Attached to the complaint were the University’s Policy and Procedures on Academic Integrity in Research and Publication, and the bylaws of the Graduate College Handbook. Those two documents contain detailed procedures as to how a complaint for research misconduct is to be investigated and resolved.

The plaintiff’s initial response to the charges argued that, notwithstanding the University’s own rules and procedures, he had been denied access to the papers and data that might aid in his defense, and that his papers had in fact been placed in the custody of the person who had initiated the charge. Although a formal decision to proceed to the next stage of the proceeding, “inquiry,” was allegedly made in May 2012, the plaintiff didn’t learn about that until September 2012, when he was notified of nine specific charges. The inquiry team’s report was issued in November 2012. Both the plaintiff and his attorney responded, alleging that the university had failed to follow its own procedures in a host of ways.

In February 2013, the plaintiff initiated the lawsuit, alleging that the academic investigation had ignored the University’s regulations and seeking preliminary and permanent injunctive relief. The plaintiff did not challenge the University’s right to make the investigation; rather, he sought injunctive relief requiring the University to follow its own regulations in doing so.

The State moved to dismiss the action, alleging that pursuant to the State Lawsuit Immunity Act and the Court of Claims Act, the lawsuit was in effect one against the State, and therefore could proceed only in the Court of Claims. The Circuit Court agreed and dismissed the action for lack of jurisdiction, and the Appellate Court affirmed.

In a majority opinion by Justice Lloyd Karmeier (joined by the Chief Justice and Justices Thomas and Kilbride), the Court reversed. The majority explained that whether the lawsuit was actually one against the State depended on the issues involved and the relief sought. The general bar against Circuit Court actions against the State was subject to a well-settled exception; when an officer or agent of the State acted unlawfully, unconstitutionally or in excess of his or her authority, an action may be brought to restrain the conduct. In effect, by acting ultra vires, the employee’s conduct ceases to be that of the State. The officer exception includes actions to require compliance with administrative rules and regulations.

Since the plaintiff was merely asking for an injunction requiring the University to follow its own rules, the suit was properly in the Circuit Court, the majority held.

Justice Burke filed a lengthy dissent, joined by Justices Freeman and Theis. The dissenters argued that the proposition on which the majority opinion rested – that a purely injunctive claim could proceed against an arm of the state when it sought merely to restrain ultra vires conduct – conflicted with other authorities, both in Illinois and elsewhere. The dissenters would have found that an action against an arm of the state is barred regardless of the nature of the relief sought. Further, the dissenters argued that not even the plaintiff’s claim against the University officer should have survived, since the complaint alleged no ongoing misconduct – only past misconduct during earlier stages of the investigation. Moreover, the dissenters pointed out counsel’s statement at oral argument that the investigation was now in the penalty phase, and suggested that the appeal was likely moot anyway – a claim which they invited the State to raise on remand.

Given the limited scope of the majority opinion and the serious questions as to whether prospective relief is even possible, the decision in Leetaru may have limited impact.

Nevertheless, the opinion is interesting for those of us who carefully follow the Court’s work. Leetaru was argued on September 18, 2014. The State was asked slightly more questions than the plaintiff was – never an encouraging sign for an appellee. The Court originally announced that it would hand Leetaru down on December 18, 2014, as we wrote here – only 91 days after the argument. Ordinarily, such a short lag time suggests that a unanimous opinion is fairly likely. Such circumstances – an opinion listed on the upcoming list, but not filed – are exceedingly rare at the Court.

Although the decision was not listed on the Court’s initial upcoming opinions list for the week of April 13, it was filed on April 16, 2015. That’s 203 days after the oral argument, about 2-3 weeks longer than the Court’s mean lag time in recent years for non-unanimous civil decisions. The 20-page dissent has certain structural features which are more typical of a majority opinion, including a detailed discussion of the facts and procedural history. Lengthy dissents are exceedingly rare at the Court. Last year, the average dissent in a civil case was only 6.6 pages, and the Court’s average dissent has been below ten pages each of the last fifteen years. Indeed, Leetaru is the longest dissent in a civil case since 2011.

Image courtesy of Flickr by Taber Andrew Bain.

Illinois Supreme Court Holds Treasurer Needs Appeal Bond Too

Posted in Illinois

14224418231_55f6c6c5b5_zEarlier this month, a unanimous Illinois Supreme Court held in Illinois State Treasurer v. Illinois Workers’ Compensation Commission that the State Treasurer, when appealing a workers’ compensation award in a case where he appears as custodian of the Injured Workers’ Benefit Fund, must file an appeal bond.

If this sounds like a minor procedural flaw, easily remedied – well, no. Understanding why requires a bit of a bit of background on the nature of appellate jurisdiction under Illinois law. Courts have jurisdiction in Illinois over all justiciable matters as a matter of constitutional law. But administrative law is different. In the administrative arena, courts have the jurisdiction the legislature says they do. So when a court sets out to review a workers’ compensation award, the prerequisites for invoking the court’s jurisdiction must be followed exactly. And one of those prerequisites is – you guessed it – is filing an appeal bond. So no appeal bond, no subject matter jurisdiction. Our detailed summary of the facts and underlying court decisions in Illinois State Treasurer is here. Our report on the oral argument is here.

Illinois State Treasurer began when a home healthcare provider to an elderly man was injured on the job. Because the patient didn’t have workers compensation insurance at the time of her injury, the claimant looked to the Injured Workers’ Benefit Fund for relief. The Fund consists of money from penalties and fines collected from employers and insurance companies pursuant to the Workers’ Compensation Act, and is intended to serve as a source of payment for employers lacking coverage. The State Treasurer serves ex officio as custodian of the Fund.

The arbitrator awarded benefits to the claimant. The Treasurer appealed, and the Commission unanimously affirmed. The Treasurer then appealed to the Circuit Court. That court affirmed, and the Treasurer sought to appeal to the Appellate Court. The Appellate Court initially reversed the award, but on rehearing, the claimant raised two arguments: first, that the award was in effect against the State, and therefore no appeal was possible, and second, that the Treasurer’s failure to file an appeal bond, as required to invoke the Appellate Court’s jurisdiction under 820 ILCS 305/19(F)(2), deprived the Appellate Court of jurisdiction. The Appellate Court rejected the first argument but agreed with the second.

In an opinion by Justice Karmeier, the Supreme Court affirmed. According to the Treasurer, the statutory requirement that “one against whom the Commission shall have rendered an award for the payment of money” must post a bond in order to invoke the court’s jurisdiction was aimed at employers and insurers, not the State Treasurer. But the Supreme Court pointed out that the legislature had used the terms employer and insurer throughout the statute. It could have easily used the same terms in Section 19(f)(2), but it deliberately used broader language. The Treasurer pointed out that awards against the State aren’t appealable unless they arise from claims by current and former employees and appointees of the Workers Compensation Commission, and argued that it was unreasonable to treat him differently. But he was different, the Court pointed out – the Treasurer was only in the litigation as the custodian of the Fund.

The Treasurer argued that he should be exempt from the bond requirement since the State is generally excused from paying court costs and analogous litigation expenses. But once again, the Court pointed out, the Treasurer was in a materially different position. In those cases, the State was a party to the litigation – here, the Treasurer was merely present in his ex officio capacity. Besides, since court costs are essentially a charge levied to help pay for the judicial system, assessing costs against the State essentially charged the taxpayers twice. An appeal bond, on the other hand, was intended for a very different purpose – to secure the payment of the award and any applicable costs if the appeal is ultimately unsuccessful. If the legislature disagreed with the Court’s construction, the Court said, it was free to amend the statute for purposes of future cases.

But in the meantime, no bond meant no jurisdiction, the Court held.

Image courtesy of Flickr by Dark Day.

Illinois Supreme Court Agrees to Decide Property Dispute Between Former Same-Sex Domestic Partners

Posted in Illinois

8460794157_f1b5d57432_zIn Hewitt v. Hewitt in 1979, the Illinois Supreme Court decided that for public policy reasons, Illinois courts cannot decide property disputes between unmarried couples. In the closing days of the March term, the Court agreed to decide whether or not Hewitt remains good law in the context of same-sex domestic partner relationships.

According to the complaint in Blumenthal v. Brewer, the parties became domestic partners in 1981 or 1982 while they were graduate students. One partner attained a law degree, the other a medical degree. The couple had three children, and subsequently allocated work and family responsibilities to care for their children. In 2002, they went through the procedures to cross-adopt their three children. In 2003, the couple registered as domestic partners.

The parties’ relationship ended in 2008. In a separate action, the parties resolved issues of custody, child support and responsibility for certain child expenses. The plaintiff – a physician – filed suit seeking to partition the home she owned with her former domestic partner. The defendant, who was by then a judge, counterclaimed for various remedies, including for a constructive trust over the residence and the physician party’s net earnings. The plaintiff successfully argued that Illinois law doesn’t recognize property claims between unmarried domestic partners, citing Hewitt.

On appeal, the defendant argued that Hewitt was no longer good law because the legislative policies underlying that decision either no longer existed or had been modified substantially. In the years since Hewitt, the legislature has repealed the criminal prohibition on nonmarital cohabilitation, prohibited differential treatment of marital and nonmarital children, adopted no-fault divorce and established civil unions (Illinois adopted same-sex marriage after the parties’ relationship terminated). The plaintiff responded that Hewitt was based not on Illinois’ former hostility to claims by unmarried cohabitants, but rather on Illinois’ refusal to recognize common-law marriage – a public policy which was still in place.

The Appellate Court agreed that Hewitt was based, at least to some degree, on the state’s refusal to recognize common law marriage. But Blumenthal was not an attempt to retroactively create a marriage, the Court concluded. The Court emphasized that Illinois law has changed dramatically in the 35 years since Hewitt. Courts across the country are increasingly inclined to enforce agreements between former cohabitants, the court pointed out, citing the landmark California case of Marvin v. Marvin as the beginning of the trend.

Besides, the Court noted, Hewitt might have unintended consequences. Although the Hewitt line of authority was purportedly intended to encourage marriage, in fact, if a more financially well-off partner could turn aside any claim from an unmarried cohabitant, he or she had a significant incentive not to marry. The Court further commented that Hewitt appeared to be based to a significant degree on the legislature’s then-recent decision to reject no-fault divorce, which the Court interpreted as a decision to prevent marriage from becoming a civil contract terminable at will.

Ultimately, the Court concluded that Illinois law no longer disfavors either the parties’ 26-year cohabitation or the property claims at issue between them. The defendant was merely seeking to assert cross claims for relief that is available to anyone else. The Court held that the trial court’s refusal to let her do so was error.

We expect Blumenthal to be decided in eight to ten months.

Image courtesy of Flickr by Alexandre Dulaunoy.

Illinois Supreme Court to Decide If State’s Union Contract Conditioned on Appropriations

Posted in Illinois

5526726905_66ccfbaf3b_zIn the closing days of the March term, the Illinois Supreme Court agreed to wade yet again into the contentious and politicized area of public employee wages and benefits. State of Illinois v. American Federation of State, County, and Municipal Employees, Council 31 poses the question of whether pay raises promised in the State’s contracts with its employee unions are conditional on the Legislature actually appropriating the necessary funds.

In 2008, the State agreed to a four-year collective bargaining agreement with AFSCME, which represents most state employees. The CBA provided for small twice-yearly wage increases in 2009, 2010 and 2011. But with the State mired in budget woes, AFSCME agreed to defer the mandated wage increases in 2009 and 2010.

In early 2011, then-Governor Quinn proposed a budget which included sufficient appropriations to fund the required raises for that year, but the legislature rejected parts of the budget. When the budget was finally approved, the State’s Central Management Services determined that there was insufficient money in it to finance the agreed increases for employees at 14 agencies. Those employees’ wages were frozen at 2011 levels, while employees at all other state agencies began receiving the increases.

AFSCME sought arbitration of the dispute. The union argued that the State was required to pay the mandated increases, but the State argued that it owed no duty to pay any employees unless and until the legislature appropriated sufficient funds – which had not happened. The arbitrator entered his award, finding that the State’s position would have required him to add language to the arbitration agreement – which he lacked the power to do. The arbitrator ordered the increases paid.

The State filed a complaint in Circuit Court seeking to vacate the award, together with an emergency motion for stay. The trial court granted the stay. In the weeks that followed, the legislature made supplemental appropriations, and several agencies experienced enough attrition to pay the increases to remaining employees, but employees in six agencies remained without the mandated increases.

The trial court held that an overriding public policy made the CBA and the subsequent agreements invalid unless the legislature appropriated the necessary funds. Following a hearing, the judge determined that the affected agencies had the funds to pay partial increases. Both the State and AFSCME appealed. Following the trial court decision, the State reached an agreement with the union to pay the partial increases due under the trial court’s decision. The State’s negotiators agreed to withdraw its appeal, but the Attorney General refused to do so. Nevertheless, AFSCME members ratified the agreement, and the increases were paid.

The Appellate Court (First District, Division 2) reversed in an opinion by Justice Neville. The Court began by summarily rejecting the notion that the State’s payments under the trial court order had mooted the appeal. The Court also briefly noted that no party had questioned its power to decide the case, even though the Justices’ staffers were members of AFSCME subject to the CBA at issue. In any event, the Court concluded that the rule of necessity authorized the Court to proceed.

The Court began by addressing the State’s argument that the arbitrator had improperly declined to disregard the language of the CBA and other union agreements on public policy grounds. The Court rejected the State’s argument, finding that the arbitrator’s authority was drawn from the agreement between the parties, and if the agreement did not expressly give him the power to consider public policy, he had no power to do so.

The State pointed to language in the CBA providing that the “provisions of this contract cannot supersede law.” Given that Section 21 of the Public Labor Relations Act provided that “employers” may negotiate multi-year collective bargaining agreements “subject to the appropriation power of the employer.” According to the State, this meant that all CBAs were by definition conditional on appropriations.

The Appellate Court disagreed. The problem, the Court found, was that the State overlooked the Act’s definition of “employer,” which expressly excluded the General Assembly.

The State next made a related argument, claiming that public policy forbade the State from negotiating any binding contracts which required the payment of funds the legislature hadn’t appropriated yet. There were two fatal flaws in that argument, the Court concluded. First of all, it ran squarely into the constitutional contract clause, which provides that “no . . . law impairing the obligation of contracts . . . shall be passed.” Second, it conflicted with the language of the Act, which expressly authorized multi-year contracts.

The Court quoted at length from a 1992 decision of the Iowa Supreme Court, AFSCME/Iowa Council 61 v. State, which the Court said involved an identical argument that the State owed its employees nothing under a CBA until appropriations were made. But the Iowa Supreme Court concluded that it would be doing the state no favors if it accepted the argument: “To do so would seriously impair its ability to function. The government must finance its affairs, must contract for buildings, highways, and a myriad of other public improvements and services. It would lead to untenable results if a government, after having contracted for needed things, did not have to pay for them.”

At bottom, the Court concluded, the State’s argument meant that notwithstanding the language of the contract clause, the legislature had a right to impair any contract involving the state at any time. Such an argument was untenable, the Court found. If the State wanted to make its promises to pay contingent on appropriations, it would have to include express language in the contract saying so.

The Court held that the arbitrator’s final award drew its essence from the State’s agreements with the union and didn’t offend public policy. Accordingly, the trial court erred by modifying the award in part.

We expect AFSCME to be decided in eight to ten months.

Image courtesy of Flickr by Donkey Hotey.

136 Means 136: Ballot Signature Requirement Requires Strict Compliance

Posted in Illinois

2422783237_d22ae31c33_oBallot access statutes nearly always require that prospective candidates present a given number of valid voters’ signatures in order to qualify for the ballot. In Illinois, nomination for offices below the statewide level requires signatures from not less than 5% nor more than 8% of the registered voters who participated in the last preceding regular election.

So what happens if the prospective candidate falls a bit short? Is substantial compliance enough?

Late in the March term, the Illinois Supreme Court answered this question in Jackson-Hicks v. The East St. Louis Board of Election Commissioners: “No.”

Candidates in the election for Mayor of East St. Louis run on a nonpartisan basis. In order to be listed on the ballot, candidates are required to present 136 valid signatures. On their face, the incumbent mayor’s petitions contained 171 signatures. Another candidate for mayor challenged the incumbent’s petitions, arguing that he didn’t have enough valid signatures to qualify. During a hearing on the challenge, an attorney for the Election Board presented evidence that at least 48 of the mayor’s signatures were invalid, leaving him with no more than 123 valid signatures.

In its written decision, the Election Board concluded that the mayor had only 123 valid signatures. Nevertheless, the Board found that the mayor had substantially complied with the statute, and ordered that his name be included on the ballot. The Circuit Court affirmed that finding, as did the Appellate Court. In an opinion by Justice Karmeier following accelerated review (without oral argument), the Supreme Court unanimously reversed.

Since the primary had passed by the time the Court issued its decision, the Mayor argued that the case was moot. The Court disagreed, pointing out that there were only three candidates, making a primary unnecessary. Given that the challenger’s goal was to prevent the mayor’s name from appearing on the ballot, the Court was still able to offer the plaintiff full relief, meaning that the case was not moot.

The Mayor argued that the ballot access provisions of the Election Code were merely directory rather than mandatory. But the Court noted that the requirements of the Election Code were typically mandatory – and the statutes governing nomination papers were certainly no exception.

The Mayor argued that his nomination papers contained enough valid signatures to serve the underlying purpose of the law – to demonstrate that a candidate has initiative and at least a minimal appeal to the voters. The Court disagreed, writing that the “Mayor’s position is unprecedented, unworkable and contrary to law.” To hold that substantial compliance satisfies the statute “would require us to disregard the clear, unambiguous and mandatory language of the statute and graft onto it exceptions and limitations the legislature did not express.”

The Court acknowledged that a few cases from the Appellate Court had held that substantial compliance was enough when the candidate complied with the basic requirements of the Code in a technically deficient manner (such as including a single nonconforming page in a petition or filing a statement of economic interest in the wrong county). But the mayor hadn’t met the basic requirements of the Code at all, according to the Court: “Here, the candidate failed to meet a threshold requirement completely.”

Ultimately, the Court viewed the Mayor’s position as completely unworkable. If substantial compliance was good enough, “there would be no way to insure consistency from one electoral jurisdiction to another, from one election to another, or even from one race to another . . . Will 90% of the statutory minimum turn out to be enough? 75%? Less than that? Candidates will be left to speculate.”

The bottom line was simple, the Court said. The mandatory minimum signatures requirement was mandatory and had to be followed. Otherwise, the candidate doesn’t qualify for the ballot. The Court remanded to the Circuit Court with instructions to enter judgment requiring that the Mayor’s name be removed from the ballot, and that any votes cast in his favor before the ballot was corrected be disregarded.

Image courtesy of Flickr by Seattle Municipal Archives.

Join Us on April 29 for “The California Supreme Court: What To Expect in 2015”

Posted in California

6700320793_a147d7d7b8_zOn Wednesday, April 29th at 11:00 AM Pacific/2:00 PM Eastern, Sedgwick’s Appellate Task Force will present its first webinar of 2015, “The California Supreme Court: What to Expect in 2015.”  We’ll preview our group’s analytical data library on the Court’s 600+ civil decisions since 2000, and take a look at the highlights of the Court’s civil docket:

  • Which Court of Appeal districts are reversed most and least often; what areas of the law the Court draws its civil docket from; whether the Court more often grants review of defense or plaintiff’s wins from the Courts of Appeal in each area of the law; reversal rates for each type of case; and which Justices tend to vote together in the most closely contested cases;
  • Will California continue to be a welcoming host to out-of state plaintiffs in complex product cases?
  • Will potential asbestos liability continue to expand 12 years after the last U.S. mine closed?
  • Who is the prevailing party when a defendant pays plaintiff for a dismissal?

For CLE details and to register for the webinar, click here .

Image courtesy of Flickr by OmiB91.

Illinois Supreme Court Holds Doctrine of Equitable Adoption Doesn’t Apply to Parentage Proceedings

Posted in Illinois

9112385886_6649902db9_zTwo years ago, the Illinois Supreme Court recognized the doctrine of equitable adoption in the context of an estate proceeding. In In re Parentage of Scarlet Z.-D., the Court was presented with the question of whether the doctrine should be extended to a parentage proceeding. In late March, the Court handed down its unanimous decision: No.

The two parties to Scarlett began living together in 1999, and became engaged not long after. In 2003, the mother – a native of Slovakia – met a child during a visit home. The mother and her fiancée decided that the mother would adopt the child (the father had no right to do so since was neither a Slovakian national nor married to the mother). The adoption was finalized under Slovakian law in 2004.

The adult parties never married; nor was the child’s Slovakian adoption domesticated in Illinois. In the summer of 2008, the adult parties’ relationship ended; the mother moved out of the couple’s house, taking the child with her. Not long after, the putative father filed a six-count petition, seeking physical custody of the child, or in the alternative, primary custody with reasonable visitation for the mother; an equitable division of child support; breach of an oral agreement to be equal parents to the child; promissory estoppel, and breach of a contract implied in fact and law. After a bench trial, the trial court concluded that the putative father lacked standing and denied relief on the first two counts.

The Appellate Court initially affirmed. On petition for leave to appeal, the Supreme Court directed the Appellate Court to reconsider in light of the Court’s recent recognition of the doctrine of equitable adoption. On reconsideration, the Appellate Court concluded that the putative father might be able to make out a case for standing under the doctrine of equitable adoption. The Supreme Court granted a second petition for leave to appeal.

On appeal, the putative father argued that the mother should be equitably estopped from challenging his standing. Equitable estoppel involves balancing of several factors: (1) the other party knowingly misrepresented or concealed material facts; (2) the party claiming estoppel didn’t know the representations were untrue when they were heard and acted upon; (3) the other party intended that the representations be acted upon by the party claiming estoppel or by the general public; (4) the party claiming estoppel reasonably relied upon the misrepresentations in good faith to his or her detriment; and (5) the party claiming estoppel has been prejudiced by his or her reliance. The Supreme Court held that the putative father’s claim failed because there was no allegation that the mother had ever suggested that he was the child’s biological or adoptive father, and any promises about future intentions were not actionable. Therefore, the mother’s ultimate termination of the putative father’s relationship with the child was not inconsistent with any factual representation.

The putative father also argued that he could remedy his lack of statutory standing pursuant to various functional parent theories. After thoroughly reviewing the state of the law with respect to such equitable theories, the Court concluded that the putative father’s argument must fail because Illinois does not recognize any functional parent theories.

Finally, the Court turned to the question of whether the putative father could get standing based on the equitable adoption doctrine. The Court pointed out that equitable adoption had been adopted by the Court only in the limited context of facilitating an inheritance from a father who apparently intended to finalize an adoption and had never finalized the proceeding. The Court concluded that there was no basis for expanding the doctrine to a parentage and custody dispute.

The Court concluded its opinion by rejecting the putative father’s common law contract claims, concluding that all of the father’s claims were, at bottom, attempts to end-run his lack of statutory standing to pursue a parentage finding and custody determination.

Image courtesy of Flickr by LukeMN.

Illinois Supreme Court Holds Captive Insurance Agents Owe Limited Tort Duty to Clients

Posted in Illinois

2957925933_85ed92d9cc_zSection 2-2201 of the Code of Civil Procedure provides that “[a]n insurance producer . . . shall exercise ordinary care and skill in renewing, procuring, binding, or placing the coverage requested by the insured or proposed insured.” (735 ILCS 5/2-2201).

For many years, Illinois insurance law has distinguished between insurance “brokers” – independent actors who act as a middleman between the insured and the insurer to procure insurance – and “agents” – who sell the insurance of a particular company exclusively. Insurance “brokers” owe their insureds a fiduciary duty. Insurance “agents” don’t. So who’s an insurance “producer” within the meaning of Section 2-2201? That’s the question posed by Skaperdas v. Country Casualty Insurance Company, which the Illinois Supreme Court handed down in the final days of the March term. Our detailed summary of the facts and underlying court decisions in Skaperdas is here. Our report on the oral argument is here.

The underlying insurer issued an automobile insurance policy to the plaintiff. Plaintiff’s fiancée was involved in an accident while driving one of his vehicles. The insurer agreed to cover the loss on the condition that the plaintiff would add his fiancée as an additional insured. Although the plaintiff apparently met with his captive insurance agent, the change wasn’t made – the driver was identified as “female” on the new policy, but the plaintiff’s fiancée wasn’t an additional insured.

Not long after, the fiancee’s minor son was injured in an accident. When the driver’s policy didn’t fully cover the son’s damages, the plaintiff filed a claim for underinsured motorist coverage. The insurer denied the claim on the grounds that neither the fiancée nor her son was a named insured. The plaintiff sued the insurer and his agent for negligence, reformation of contract, a declaration of insurance coverage and respondeat superior. The Circuit Court granted the defendants’ motion to dismiss the negligence and respondeat claims, but the Appellate Court reversed.

In a unanimous opinion by Justice Kilbride, the Supreme Court affirmed. The Court turned first to Black’s Law Dictionary, concluding that an “insurance producer” could be plausibly understood as both an agent and a broker. The defendants argued that defining an “insurance producer” as meaning either an agent or a broker rendered the later provisions of the statute regarding fiduciary claims surplusage, but the Court disagreed, concluding that the statute effectively limited fiduciary claims regardless of whether captive agents were defined as “insurance producers.”

The Court placed considerable weight on the definition of “insurance producer” found in the Insurance Code: “a person required to be licensed under the laws of this State to sell, solicit, or negotiate insurance.” (215 ILCS 5/500-10.) Even though Section 5/500-10 wasn’t adopted until five years after the statute at issue, the Court concluded that the legislature’s decision not to differentiate between “brokers” and “agents” in defining “insurance producer” should be given “substantial weight.” Nobody suggested that there was a difference between brokers and agents in the legislative debate either.

Ultimately, the Court held that Section 2-201 imposed a limited duty on insurance agents as well as brokers. An agent was not required to find the best possible coverage for his or her insured – even if that coverage was with another company – the Court said. If need be, the agent could fulfill his or her duty by telling the insured to seek coverage elsewhere. Nor was a non-specific request to “make sure I’m covered” sufficient to trigger the defendant’s duty of care. But reading Section 5/500-10 together with Section 2-201, the Court concluded that when faced with a specific request for coverage, even a captive insurance agent had a duty of due care in connection with the request. Therefore, the Court affirmed the Appellate Court’s reversal with respect to the agent. The Court also affirmed the court’s reversal with respect to the insurer, holding that respondeat superior was sufficient to potentially find the insurer liable.

Image courtesy of Flickr by Chris Yarzab.

Florida Supreme Court Overturns Directed Verdict for Defendant in Negligent Security Case

Posted in Florida

188348337_7af825ea03_zOn February 12, 2015, the Florida Supreme Court quashed the Fourth District Court of Appeal’s decision in Sanders v. ERP Operating Limited Partnership, 96 So.3d 929 (Fla. 4th DCA 2012) and held that evidence of lapses in security raised a fact issue for the jury as to whether those failures allowed assailants to more easily gain access to the decedents’ apartments, thus facilitating their murders. The Court reviewed the case based on certified conflict with one of its prior decisions and with a decision of the Third District Court of Appeal.

To read the opinion, here.

In late 2004, two young adults moved into an apartment complex marketed as a “gated community” with a gated front entrance. A year after they moved in, the tenants were shot to death by unknown assailants inside their apartment. While there was no sign of forced entry, cash and other valuables were stolen from the apartment. The plaintiff, as personal representative of the decedents’ estates, sued the property owner alleging that its negligence was the proximate cause of the deaths.

During the trial, evidence revealed that the defendant had a manual providing that a notice to residents was recommended when a “significant crime” occurred on the property, especially a violent crime or forced-entry burglary. No notices were sent to the residents regarding twenty criminal incidents occurring in the three years before the murders. Moreover, there were two criminal incidents where the gate had been broken and perpetrators followed the residents onto the premises. One of these incidents resulted in an armed robbery and the other resulted in an assault. The entrance gate was broken for approximately two months before the murders.

The defendant’s expert, a security consultant, testified that the murders were not foreseeable, as none of the crimes that occurred on the premises in the three years before the murders were violent. The expert opined that the security measures on the premises were more than reasonable and met or exceeded the industry standard for complexes in the location. He further testified that there was no sign of forced entry and that he believed that the door was opened to the person that committed the murders.

The plaintiff’s expert, a criminology expert, testified that most of the crimes at the complex in the three years before the murders were opportunistic in nature and that the murders occurred in the course of a home invasion, an opportunistic crime. He also testified that the defendant’s personnel training video addressed the importance of repairs to mechanical failures, yet the front gate of the apartment complex had been broken for months before the murders. The training video also discussed the need to minimize crime “through awareness.”
The defendant moved for a directed verdict, arguing that the plaintiff had not established proximate cause. The trial court denied the motion. The jury found the defendant 40% comparatively negligent and awarded damages of $4.5 million dollars, apportioned to various survivors of the decedents. The defendant moved for a new trial and the judgment notwithstanding the verdict, which the trial court denied.

On appeal, the Fourth District reversed the ruling on the defendant’s motion for directed verdict, stating that “without proof of how the assailants gained entry into the apartment, [the plaintiff] simply could not prove causation.” The Florida Supreme Court accepted jurisdiction to determine whether the Fourth District erred in vacating the jury verdict and entering a directed verdict in the defendant’s favor.

The Court began its analysis by stating that whether or not proximate causation exists is a question of fact, involving an inquiry into whether the defendant’s breach of duty foreseeably and substantially contributed to the plaintiff’s injuries. The Court reiterated plaintiffs alleging negligence must meet “the more likely than not standard of causation.” Moreover, in order for a court to remove the case from the trier of fact and grant a directed verdict, there must be only one reasonable inference from the plaintiff’s evidence. An appellate court reviewing the grant of a directed verdict must view the evidence and all inferences of fact in the light most favorable to the non-moving party, and can affirm a directed verdict only where no proper view of the evidence could sustain a verdict in favor of the non-moving party.

The Court found that the plaintiff in the instant case raised a reasonable inference that the defendant’s breach of duty (i.e., the inoperable gate), may have contributed to the incident. Despite the defendant’s argument, and the Fourth District’s apparent conclusion, that the decedents opened the door for their assailants, this is something which should have properly been considered by a jury in a comparative negligence analysis and is not the basis for a directed verdict.

Because the plaintiff presented evidence that could support a finding that the defendant more likely than not substantially contributed to the murders in this case, the Court quashed the Fourth District’s decision granting a directed verdict to the defendant.

Justice Polston wrote a dissenting opinion in which he stated that the Court did not have jurisdiction to review the case.

Image courtesy of Flickr by Stan Wiechers.