The Appellate Strategist : Appellate Lawyers & Attorneys for Updates on Trial Consultations, Amicus Briefs & Punitive Damage Awards

The United States Supreme Court just issued an opinion holding that state statutes that purport to limit a claimant’s ability to bring a class action do not govern proceedings in federal court, even in a diversity case.  Shady Grove Orthopedic Assoc., P.A. v. Allstate Ins. Co. began as claimant Shady Grove's attempt to recover statutory interest from Allstate under New York law.  Shady Grove sued in federal court in Brooklyn, seeking class action status, arguing that Allstate routinely failed to pay interest on overdue benefits.

The District Court dismissed the action for lack of subject matter jurisdiction.  The court accepted Allstate’s argument that a New York statute that precluded a suit for the recovery of a “penalty” from proceeding as a class action controlled in a diversity suit.  The Second Circuit affirmed.  It found that there was no conflict between the New York statute and Federal Rule of Civil Procedure 23 because the statute governed the eligibility of a case for class treatment while Rule 23 only governed whether an eligible case would be certified.

A closely divided Supreme Court disagreed.

Justice Scalia, writing for the court, held that the determination of whether the class could proceed as a class action was governed solely by Rule 23.  New York had no power to govern federal court proceedings through its anti-class action statute.  The only real question was whether Rule 23 violates the Rules Enabling Act in this instance by altering the parties’ substantive rights.  It does not.  The class action procedure is merely a joinder rule that does not change the underlying substantive position of the case.  It rejected Allstate’s argument that the New York statute had created a substantive right to be free of class action’s in penalty cases.  Ultimately, the characterization of the state rule as substantive or procedural did not matter:

In sum, it is not the substantive or procedural nature or purpose of the affected state law that matters, but the substantive or procedural nature of the Federal Rule.  We have held…that the validity of a Federal Rule depends entirely upon whether it regulates procedure….If it does, it is authorized by [the Rules Enabling Act] and is valid in all jurisdictions regardless of its incidental effect upon state-created rights.

Justice Scalia acknowledged that the result of the opinion would produce forum shopping.  However, such forum shopping is merely the “inevitable…result of a uniform system of federal procedure.”

The dissenters, led by Justice Ginsburg, preferred to view the New York statute as regulating the remedy permitted for violating the statute, not an attempt to interfere with federal procedure.  By allowing a class action to proceed in federal court where it could not have been brought in state court, the majority had effectively amended a state statute: “The Court today approves Shady Grove’s attempt to transform a $500 case into a $5,000,000 award, although the State creating the right to recover has proscribed this alchemy.”

This opinion may well have profound effects on federal practice:

• State restrictions on class actions will not govern federal diversity cases.  Attorneys contemplating removal under the Class Action Fairness Act must take this fact into account. 
• State tort reform measures that are couched in terms of procedure, such as special joinder rules, may not be applied in federal diversity cases.
• In arguing for the application of rules derived from state law, it may not be sufficient to argue that the rule is “substantive” in nature.  To displace a federal procedural rule it will be necessary to show that the rule violates the Rules Enabling Act.

At minimum, Shady Grove, substantially limits a state’s ability to restrict class actions. The opinion may have additional, far-ranging effects on the relationship of state and federal law.

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With a recent employment decision, the California Supreme Court has handed insurance companies a compelling new argument, potentially limiting their exposure to punitive damages in bad faith cases. The question is: when is an insurance company subject to punitive damages for the acts of an employee/ adjuster in connection with the handling of a single insured’s claim for benefits? The answer is, in all probability: not as often as it was before.

In California, a corporate defendant can only be subject to punitive damages if a corporate officer, director or managing agent committed, authorized, or ratified the wrongful conduct. Cal. Civil Code, § 3294(b). Everyone knows who the officers and directors are, but the meaning of "managing agent" has been open to debate.

In 1999, the State Supreme Court, in White v. Ultramar, Inc. (1999) 21 Cal.4th 563, held a managing agent is someone who makes "corporate policy."

But White was an employment case. For the next decade, insureds continued to argue that the managing agent test was different for corporate insurer defendants. They relied on a 1972 State Supreme Court opinion – a holdover from the Bird Court - in an insurance bad faith case: Egan v. Mututal of Omaha Ins. Co. (1979) 24 Cal.3d 809. Egan, decided before the punitive damages statute was amended, had said that the corporate insurer could be liable for punitives for the adjuster’s malicious, fraudulent or oppressive acts because the insurer vested the adjuster with discretion over the handling of the claim.

Egan’s test for managing agent (discretion over a single claim) appears at odds with White’s narrower test (one who makes "corporate policy.") Which rule applies in bad faith cases? The White court clearly intended to narrow Egan’s definition of managing agent, but was Egan still good law in insurance lawsuits? White did not overrule Egan and in fact sometimes cited with it with seeming approval.

The tension between the two tests went unresolved, and indeed largely unnoticed until 2009. Then, one California intermediate court of appeal came down on the Egan side in an insurance case. (Major v. Western Mut. Ins. Co. (2009) 169 Cal.App.4th 1197.) Major held that it is the vesting of discretion in the adjuster that matters, not so much whether that adjuster is thereby making corporate policy.

But Major was on the books for barely half a year when it turned out to be not so "major" after all. In Roby v. McKesson Corp. (2009) 47 Cal.4th 686, the California Supreme Court explained what it meant by the making of "corporate policy," in the bargain further narrowing the test:

"we were referring to formal policies that affect a substantial part of the company and that are the type likely to come to the attention of corporate leadership. It is this sort of broad authority that justifies punishing an entire company for an otherwise isolated act of oppression, fraud or malice." (Emphasis added.)

Note the critical language:

• The policy must be "formal;" it must affect a "substantial part of the company;" it should be of the type "likely" to come to the attention of the corporation’s leadership; indeed, the very rationale for imposing punitive damages is to punish the corporation for something it did, in its own right, not for a renegade or isolated act.
   
• Roby thereby rejects the notion that a corporation can be subject to punitive damages for what might be characterized as the making of ad hoc "policy." Yet that is precisely what a rogue or unsupervised insurance adjuster does when "maliciously" handling a single claim.

Defense lawyers take note: Roby offers a potent new weapon in the arsenal for defending against punitive damage claims in bad faith cases. It is far from clear that an insurer can be subject to any punitive damages for merely vesting discretion in an adjuster in connection with a single claim for benefits.

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In law school, it seemed simple enough: business relationships were generally governed by contract and warranty, and tort was reserved for conduct that hurt people or damaged property. But in practice, the line is constantly shifting: the plaintiffs’ bar – often aided by state legislatures – tries to turn routine business disputes into torts, while the defense bar responds that the parties’ relationship should be governed by the terms of their negotiated contract.

The Supreme Court chose an apt metaphor for this battle in a 1986 maritime case, worrying that if this trend were allowed to develop too far, “contract law would drown in a sea of tort.”

Defense lawyers have a potent weapon at their command in defending their clients’ negotiated allocations of risk: the economic loss rule. Economic losses are frustrated commercial expectations: “it wasn’t worth what I paid,” or “it broke,” or “I didn’t make as much money as I expected.” The economic loss rule, simply stated, holds that where a plaintiff has suffered nothing but economic losses, tort claims are barred, and he or she must sue, if at all, on the contract.

Last week, the Tenth Circuit reaffirmed this important doctrine in Mountain Bird, Inc. v. Goodrich Corporation [pdf]. There, plaintiff purchased an aircraft which included an optional de-icing system which the manufacturer said was “certified for flight in icing conditions.” The plaintiff added an additional after-market de-icing system, also manufactured by the same defendant. Five years after it was purchased, the aircraft crashed, allegedly due to ice accumulating on the wings. The owner of the aircraft sued in tort, seeking to recover the value of the plane.

On appeal, plaintiffs argued that their claim came under an exception to the economic loss rule for expert services. Plaintiff offered an affidavit saying that it wouldn’t have bought the plane if the defendant hadn’t issued a form saying it was certified for flight in icing conditions.

The Court disagreed, pointing out that the defendant hadn’t claimed to be a certification expert:

[W]e would not infer that a car manufacturer held itself out as a vehicle safety certification expert by advertising that its cars complied with federal safety regulation. To do so would permit the special relationship exception to swallow the rule by allowing tort claims against every manufacturer of a regulated product.

The plaintiffs pointed to a controversial line of California cases imposing tort duties based on a series of policy-based factors, including the extent to which the transaction was intended to affect plaintiff, the closeness of the connection between the defendant’s conduct and the plaintiff’s injury, and the moral blameworthiness of defendant’s conduct. The Court declined to apply these cases where the parties’ relationship was already governed by a contract.

In the forty-five years since the economic loss rule was first stated by the California Supreme Court, the doctrine has spread to nearly every state in the country. However, the contours of the doctrine vary somewhat from state to state.

In 2004, the American Law Institute announced that as part of its ongoing work on the third generation of Restatements, it would undertake the “Restatement (Third) of Torts: Economic Torts and Related Wrongs.” Unfortunately, that project has been on hold since 2007, when the Reporter resigned. Given that the conflict between contract and tort continues every day in commercial litigation across the country, it is time for work on the ALI’s proposed Restatement to resume. In the meantime, when looking for a tool to weed out tort claims from a business dispute, defense counsel should keep the economic loss rule firmly in mind.

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The problem of coverage for the so-called "innocent insured" is a recurring one.  The issue arises when there is more than one insured on the policy and one commits an act that would bar coverage.  Does that act bar coverage for all, or only for the intentional actor?  In California, this problem has reared its head again, or, more accurately, two heads, in the form of two cases the state Supreme Court has agreed to hear and decide.  One presents the issue in the context of property coverage, the other as whether there is a duty to defend the non-actor insured under a liability policy.

• Century National Ins. Co. v. Garcia, S179252, rev. gr. 3/17/10.  The state Supreme Court just granted review last week.  At issue is whether an insurer may enforce an exclusion in a fire policy that denies coverage to "innocent insureds" for damages from a fire intentionally caused by a coinsured.  The gist of the insured's argument is that California Insurance Code Section 2071 mandates the language of fire policies, and it couches the intentional acts exclusion in terms of "the insured."  Century National's policy barred coverage for all when any insured acted intentionally.  Garcia asks whether insurers may deviate from the statute's prescribed language, and to what extent.
   
• Minkler v. Safeco Ins. Co., S174106, question certified 8/12/10.  Minkler, now fully briefed, asks whether the severability clause in a liability insurance policy can trump an intentional acts exclusion which prohibits coverage for all insureds when "an insured" -- i.e., any insured -- has committed an excluded intentional act.  In Minkler, one insured committed child sex abuse.  The victim sued not only the abuser but his mother, also an insured, for negligently-supervising her adult son.  The victim and insured in Minkler argue that the severability clause creates separate insurance policies, and therefore, an "innocent" insured sued for negligently-supervising the intentional actor is entitled to a defense.  Their theory is that because there supposedly are "separate" policies, the only intent that is relevant is that of the mother, who never committed an intentional act.  The insurer, by contrast, contends that the severability clause was never designed to rewrite the plain language of the exclusions.  The insurer is represented by Appellate Strategist lawyers.

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On March 23, the U.S. Supreme Court issued a unanimous opinion limiting the rights of litigants to challenge a judgment outside the ordinary appeals process by arguing the judgment is "void." In United Student Aid Funds v. Espinosa (.pdf), the Supreme Court considered an order in a chapter 13 bankruptcy case that approved a plan allowing a student loan debtor to discharge his obligation to pay interest on his loans once he had paid off the principal. The court had erred in approving the plan because a student loan debtor must establish "undue hardship" to obtain an interest discharge in a separate proceeding in which the debtor must serve a summons on the creditor.

Years after the plan was approved, the creditor brought an action to recover the interest and for relief from the judgment under Federal Rule 60(b)(4), arguing that the initial order approving the plan was void. 

The Supreme Court disagreed.

Such a collateral attack is available only where the trial court acted without "an arguable basis for jurisdiction" or where the other party's due process rights were violated. The bankruptcy court certainly had the authority to approve a plan. It simply committed a legal error in not requiring proof of "undue hardship." Further, the lender had actual notice of the proposed plan. The irregularity in not serving a separate summons did not amount to a due process violation.  If lender was unhappy with the order approving the plan it had to file a timely appeal.

The lesson to litigants is clear and important.  Even if you think that the trial court is acting outside its authority, do not defer an appeal on the theory that the judgment can be attacked as void later on.  So long as there is some arguable basis that the court had jurisdiction to enter the order, it must be challenged through a timely appeal.

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Insurance brokers in Florida can now be liable to insurance companies which suffer a loss as a result of the broker’s own fraud or negligence in providing information in an application material to the issuance of a policy.

An appellate court in Florida has issued an opinion applying section 552 of the Restatement (Second) of Torts to insurance brokers, thus allowing claims for negligence and fraudulent misrepresentation to proceed against a broker who did not fully disclose all material information relied upon by the insurance company in issuing a policy.

In Liberty Surplus Ins. Corp., Inc. v. First Indemnity Ins. Servs., Inc. (.pdf), Florida’s Fourth District Court of Appeal reversed the trial court’s dismissal of a complaint filed by an insurance company against a broker for, among other things, negligence and fraudulent misrepresentation. The broker had submitted an application for professional liability insurance on behalf of a law firm. The law firm provided full disclosure to the broker of numerous malpractice claims and disciplinary proceedings involving the firm and its members over the preceding 5-year period; however, the broker only forwarded some, but not all, of that information to the insurance company as part of the application. The insurance company issued and subsequently renewed the professional liability policy to the law firm.

After the law firm was sued in a class action for professional malpractice action, the insurance company discovered the information about the prior claims and proceedings that the broker had not disclosed. The insurance company settled the underlying lawsuit against its insured and filed a complaint against the broker to recover the amount it paid. The trial court dismissed the complaint with prejudice on the ground that any misrepresentations or altering of the application by the broker were imputed to the insured and no legal relationship existed between the insurer and broker.

Section 552 of the Restatement (Second) of Torts provides:

(1) One who, in the course, of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

Although Florida had previously adopted section 552 and applied it to professionals such as accountants, title agents, and other types of professionals who supply information to business transactions, that provision had never been expressly applied to insurance brokers – until now. The court found the application of section 552 to an insurance broker to be appropriate when the broker submits an application for insurance that fails to disclose material facts about the applicant that the insurer justifiably relies upon in issuing a policy.

As such, insurance companies can now sue brokers in Florida for negligently or fraudulently misrepresenting or withholding material facts in an application for insurance.

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This afternoon, the Illinois Supreme Court allowed petitions for review in eight new civil cases.  They are:

• Williams v. Board of Review, 395 Ill.App.3d 337 (1st Dist., 2009), which involves review of a decision by the Board of Review of the Department of Employment Security to deny a terminated employee's application for a Federally-funded trade readjustment allowance;
   
• In re County Collector of Du Page Co., 2009 WL 3970918 (2nd Dist., 2009), a case involving the scope of the power to tax on behalf of a forest preserve district to pay for the district's contribution to the Municipal Retirement Fund;
   
• In re Torski C., 395 Ill.App.3d 1010 (4th Dist., 2009), which involves the question of whether the definition of "dangerous conduct" found in the involuntary commitment statute is void for vagueness;
   
• Ries v. City of Chicago, 396 Ill.App.3d 418 (1st Dist., 2009), a personal injury suit involving the scope of a city's immunity from liability for the conduct of a police officer during the pursuit of a stolen police vehicle;
   
• Johnston v. Weil, 336 Ill.Dec. 285 (1st Dist., 2009), which involves the question of whether the Confidentiality Act applies to communications during an evaluation made by a court-appointed independent evaluator with respect to custody and visitation issues;
   
• Kaufman v. Jersey Community Hospital, 396 Ill.App.3d 729 (4th Dist., 2009), which involves the construction of Section 8-101 of the Tort Immunity Act, 745 ILCS 10/8-101, providing limitations periods governing (a) claims against local entities or their employees; and (b) claims against such entities arising out of patient care;
   
• Goodman v. Ward, 2010 WL 184081 (3rd Dist., 2010), which involves the question of whether a candidate for a judgeship in a particular subcircuit must be a resident of that subcircuit on the date of his ballot petition; and
   
• Hossfeld v. Illinois State Board of Elections, 2010 WL 743877 (1st Dist., 2010), which involves the meaning of the requirement that a candidate for state Senate in a primary election must be a "qualified primary voter" of his or her party.

We will update Appellate Strategist's database of civil issues pending at the Illinois Supreme Court shortly with our analysis of these new cases.

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The Appellate Strategist was the first blog to offer a comprehensive, regularly-updated database of civil issues -- broken down by category and subject matter -- that the California Supreme Court has agreed to hear and decide.

We are proud to announce two new features.

1. Since this "preview of coming attractions" has been one of our most popular features, we have expanded our reach to track and report on civil issues pending before the Texas Supreme Court and the Illinois Supreme Court.
    
2. In the coming months, we will be adding Florida, New York and New Jersey to our coverage of state Supreme Courts. 

We welcome your comments.

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Input from an amicus curiae can be invaluable to a court struggling with a difficult issue -- as most matters pending before a High Court are -- but can be counterproductive if not done properly or in the right situation. 

Before tendering another brief to a busy court that reads an enormous amount of material contained in the parties’ briefs and appellate record, find out what a particular appellate panel may (or may not) want.

Obviously, this is more easily accomplished when the intermediate court is divided into divisions where the judges regularly sit together, but the information can be garnered even when panels are not pre-set. Some judges at the intermediate appellate level have expressed complete disinterest in amicus briefs, noting the parties can provide whatever is needed to decide the parties' dispute at hand. But at courts of last resort, that type of resistance is not uncommon, since the justices are called upon to decide significant legal issues applicable to the public, not just the parties before them.

Of course, any submission must comply with the rules governing amicus submissions in the court before which you want to file your amicus brief.  A comprehensive list* of all the state rules was collected by Sarah F. Corbally and Donald C. Bross in their: "A Practical Guide for Filing Amicus Curiae briefs in state appellate courts," (.pdf). But that was published in 2001 and, though useful as a starting point, must be updated.  For example, this table references Rule 14 for my home jurisdiction, California, but this rule has been amended and renumbered; California’s current amicus rules are Rule 8.200 [Courts of Appeal] and Rule 8.520 [Supreme Court]. 

Next, figure out a way to articulate and contribute something significant that the parties did not include in their briefs. 

Although there are occasions when a "me too" replication of a party's brief is effective, that is usually productive only in garnering the court's interest in taking the case.  Generally, after the case is accepted and being briefed on the merits, an amicus needs to bring new perspectives to the court's attention. Statistical information or data to show the potential impact of a court's decision is often helpful in summarizing a particular point and directing the court's focus. 

A good amicus brief explains how a particular resolution will impact an entire industry, or why a change in the current state of the law is necessary to accommodate changing societal interests.  

The American Bar Association's website provides guidelines (.pdf) it uses when considering whether it will endorse an amicus brief.  Although many other examples exist, the ABA's list highlights universally applicable principles, which serve as reminders to assist you in being an effective advocates speaking on behalf of a "friend of the court."

*STAY TUNED: The Corbally/Bross table is referenced in several articles over the past decade, but does not appear to have been updated since its compilation.  We will be updating the table and publishing it in this blog soon.

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If a business evicts a patron on the grounds that he's intoxicated, puts him in his car and requires him to drive away, does the business have a tort duty to persons the patron injures?  According to the Illinois Supreme Court, the answer is "yes."  Simmons v. Homatas, No. 108108(.pdf).

Defendant Homatas visited a strip club.  Because the club featured nude dancing, it was barred from holding a liquor license.  However, the club encouraged patrons to bring their own liquor into the club, and defendant did so.  When Homatas was discovered vomiting in the restroom, club employees ejected him from the club, instructed the valet service to bring his car to the front door, put him in the car and required him to drive away.  Not long after, Homatas collided with another car, killing three passengers.

Because the club didn't sell Homatas liquor, the plaintiffs couldn't recover under the Dram Shop Act.  But that wasn't the end of it, according to the Court.  The Dram Shop Act only preempts claims based on the act of selling or providing alcoholic beverages; it doesn't necessarily preclude liability for conduct independent of providing alcohol which led to a plaintiff's injuries.  The club argued that it had no duty to determine whether Homatas was intoxicated, but the Court held it wasn't imposing one -- club employees had voluntarily concluded that the defendant was intoxicated and taken it upon themselves to force him to get in his car and drive away.

The Court held that plaintiffs' complaint alleged enough facts to give the club a common law duty within the meaning of Section 876 of the Restatement of Torts, which imposes liability on those who give substantial assistance or encouragement to someone's tortious conduct.  Justices Freeman and Burke dissented, concluding that plaintiffs' factual allegations weren't sufficient for liability to attach.  Their opinion is a good road map to defense counsel arguing that plaintiffs' allegations aren't "substantial" enough to satisfy Section 876.

The majority took pains to discourage anyone wanting to interpret its holding expansively.  The case presented "special circumstances," the Court wrote:

We do not hold today that restaurants, parking lot attendants or social hosts are required to monitor their patrons and guests to determine whether they are intoxicated.  We hold only that where . . . a defendant is alleged to have removed a patron for being intoxicated, places the patron into a vehicle and requires him to drive off, such facts are sufficient to state a common law negligence cause of action.

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Nacht & Lewis Architects, Inc. v. Superior Court may be the most widely cited case in California.  It seems to appear in most responses to Form Interrogatory Nos. 12.2 and 12.3 to justify refusing to produce recorded interviews of witnesses, any resulting attorney notes, or a list of interviewed witnesses.  Now those numerous discovery responses may be in question.  In Coito v. Superior Court, [pdf] California's Fifth District Court of Appeal considered and rejected Nacht, holding in a divided decision that attorney notes from witness interviews and the list of those interviewed will often be discoverable. 

These conflicting decisions leave two crucial questions unresolved. 1) Do the questions asked by counsel in an interview reveal counsel’s impressions, conclusions, opinions, or theories?  2) Does the selection of who to interview reveal the same?  Coito says not usually to both, Nacht says yes.  Given the frequency in which these issues arise, the state Supreme Court may be asked to intervene to clarify the issue and provide clear guidelines for California litigators and overworked trial courts.

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The California Court of Appeal has issued an opinion which, if allowed to stand, threatens to eat away at the once-settled body of law that prohibits third-party claimants who were injured by an insured from suing the insured's insurance company for unfair claims settlement practices under California Insurance Code § 790.03.  Over 20 years ago, the State Supreme Court held that only the State's Insurance Commissioner may pursue insurers for improper settlement practices under that statute; § 790.03 does not grant either insureds or third-party claimants the right to sue insurers for violating the statute's prohibitions.  (Moradi-Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287.)

But the new opinion -- from the intermediate appellate court -- would create a loophole that could accommodate a whole fleet of trucks.  (Zhang v. Superior Court (2009) 178 Cal.App.4th 1081.)  According to Zhang, if plaintiff's allegations are not limited to unfair claims handling, but also include "specific" allegations that the insurer "made fraudulent misrepresentations and promulgated misleading advertising" -- i.e., it never intended to pay covered claims -- the complaint will survive the insurer's demurrer challenge.  However, to prevail, plaintiff would be required to prove the insurer made false representations to the public and that the insurer had a policy that was inconsistent with these representations.

Zhang candidly acknowledged it disagreed with a prior opinion which held squarely to the contrary.  (Textron Financial Corp. v. National Union Fire Ins. Co. (2004) 118 Cal.App.4th 1061.)  The conflict in the published opinions of the intermediate appellate courts makes Zhang a prime candidate for review by the California Supreme Court.  Indeed, the high court extended its time to rule on the insurer's Petition for Review until March 9.  (Ptn. for Review filed 12/09/09, No. S18542.)

Zhang is a troubling opinion, and Appellate Strategist urges interested parties to support the insurer's petition.  It is easy enough to allege a policy or practice.  Under this decision, that alone is sufficient to defeat the insurer's demurrer against what should have been a stillborn claim.  The value of Moradi-Shalal is that it deals an immediate fatal blow, saving defendants the time and expense of discovery and trial on allegations a plaintiff cannot possibly prove.  If Zhang survives, the insurer cannot defeat the suit short of a motion for summary judgment, and perhaps not even then.

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In 2003, Congress enacted the latest version of the Medicare Act.  It contained far broader language than previous versions on what State law claims it preempted: “The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA [Medicare Advantage] plans which are offered  by MA organizations under this part.” (42 U.S.C. § 1395w-26(b)(3).) 

The scope and meaning of this new preemption language is being litigated around the country, but as yet precious few cases have made their way through the appellate courts.  One that has comes out of California.  In Yarick v. PacifiCare of California (2009) 179 Cal. App. 4th 1158, the State’s intermediate Court of Appeal held the 2003 Act expressly preempted the enrollee’s statutorily-based state causes of action, and impliedly preempted state common law claims.  Yarick also rejected plaintiffs’ argument that the licensing exception within the Medicare Act's preemption clause could save the claims. Months before, the Ninth Circuit Court of Appeals had reached a similar conclusion, but then granted rehearing.  (Uhm v. Humana, Inc. (9th Cir. Docket No. 06-35672).  Since a grant of rehearing vacates a published opinion, the score rolled back to zero. 

Now the score is back to Plans: 1; enrollees: 0.  As of this writing, Yarick is the only published appellate case anywhere in the country to address the preemption defense on the merits. (Previously, the Eleventh Circuit Court of Appeals rejected an argument that the Medicare Act completely preempted state law claims to afford federal court's subject matter jurisdiction. (Dial v. Healthspring of Alabama, Inc. (11th Cir. 2008) 541 F.3d 1044).)    This is an important and recurring issue, and we haven’t heard the last of it.  Expect to see all manner of decisions on this hot-button question from courts around the country.  As those opinions come down, Appellate Strategist will report on them, and provide a running total  box score.

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Medical Malpractice – Wrongful Death. Is an arbitration clause in a doctor-patient financial agreement which required all disputes relating to diagnosis, treatment, or care of patient be resolved by arbitration, limited non-economic damages and required compliance with the presuit notice requirements contrary to the public policy embodied in Chapter 766? Franks v. Bowers, No. SC11-1258 (review granted Nov. 8, 2011). DCA decision: 62 So. 3d 16 (Fla. 1st DCA 2011). Status: briefing complete, Oral Argument scheduled for June 5, 2012.

Statute of Limitation. Is a wrongful death action barred by the statute of limitation because any personal injury action abated upon death of the decedent, and a separate wrongful death action was not filed prior to the expiration of the two-year statute of limitation for that cause of action? Capone v. Philip Morris USA, Inc., No. SC11-849 (review granted Oct. 17, 2011). DCA decision: 56 So. 3d 34 (Fla. 3d DCA 2010). Status: briefing; Oral Argument scheduled for June 5, 2012.

Nursing Homes – Arbitration Clause. Question Certified: Does the execution of a nursing home arbitration agreement by a party with the capacity to contract, bind the patient’s estate and statutory heirs in a subsequent wrongful death action arising from an alleged tort within the scope of an otherwise valid arbitration agreement? Laizure v. Avante at Leesburg, Inc., No. SC10-2132 (review granted Dec. 14, 2010). DCA decision: 44 So. 3d 1254 (Fla. 5th DCA 2010). Status: briefing complete; no Oral Argument.

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Negligence – Duty to Inspect - New Trial.   Did the trial court abuse its discretion in granting a new trial on the basis that the jury verdict in favor of defendant was contrary to the manifest weight of the evidence where review of the record reveals substantial conflicting evidence concerning reasonableness of the defendant’s inspection of a backhoe loader and its breaking system? Did trial court abuse its discretion in granting new trial based on defense counsel’s references to the exculpatory language in the consumer service agreement during closing arguments where plaintiff failed to object or move for a mistrial and where argument failed to rise to the level of fundamental error because the argument was not improper, harmful, incurable or damaging? Rosier v. Ring Power Corp., No. SC11-1641 (review granted March 23, 2012). DCA decision: 67 So. 3d 1115 (Fla. 1st DCA 2011). Status: briefing; Oral Argument to be set by separate order.

Medical Malpractice – Limitation of Actions.  Is a complaint untimely filed when the plaintiff has purchased a 90-day extension of the statute of limitations pursuant to section 766.104(2), Florida Statutes, and when negotiations are cut off with less than 60 days remaining of the statute of limitations, but the complaint is not filed until 78 days later? Patrick v. Gatien, SC11-1466 (review granted Feb. 7, 2012). DCA decision: 65 So. 3d 42 (Fla. 1st DCA 2011). Status: briefing, Oral Argument to be set by separate order.

Medical Malpractice – Wrongful Death. Is an arbitration clause in a doctor-patient financial agreement which required all disputes relating to diagnosis, treatment, or care of patient be resolved by arbitration, limited non-economic damages and required compliance with the presuit notice requirements contrary to the public policy embodied in Chapter 766? Franks v. Bowers, No. SC11-1258 (review granted Nov. 8, 2011). DCA decision: 62 So. 3d 16 (Fla. 1st DCA 2011). Status: briefing complete; Oral Argument scheduled for June 5, 2012.

Public Employees – Unfair Labor Practices: Does conduct, which included granting the employee sick leave and then accusing him of abandoning his job; unfairly charging employee with violating a regulation regarding his computer password; failing to enthusiastically endorse employee’s “Rookie Teacher-of-the-Year” award; failing to place employee’s “Rookie Teacher-of-the-Year” announcement on the forward face of the school marquee over spring break; and failing to personally announce employee’s award on the school intercom, sufficiently evidence animus to sustain allegations of unfair labor practices? Koren v. Sch. Bd. of Miami Dade Cnty., No. SC10-2366 (review granted April 18, 2011). DCA decision: 46 So. 3d 1090 (Fla. 3d DCA 2010). Status: decision pending; Oral Argument Video.

Negligence – Rear-End Collision. Whether presumption of negligence in rear-end collision applies where a passenger in the following vehicle sues the lead driver for negligence? Birge v. Charron, No. SC10-1755 (review granted May 13, 2011). DCA decision: 37 So. 3d 292 (Fla. 5th DCA 2010). Status: briefing complete; no Oral Argument.

Dental Malpractice – Physician’s Right to Confer with Attorney. Does allowing a treating physician to consult with his or her own attorney prior to being deposed violate the patient confidentiality statute? Hasan v. Garvar, No. SC10-1361 (review granted Jan. 21, 2011). DCA decision: 34 So. 3d 785 (Fla. 4th DCA 2010). Status: decision pending; Oral Argument Video

Birth Related Neurological Injury – Parental Compensation Statute. Question certified: Does the limitation in section 766.31(1)(b)1., Florida Statutes, of a single award of $100,000 to both parents violate the Equal Protection Clause of the United States and Florida Constitutions? Samples v. Fla. Birth Related Neurological Injury Comp. Ass’n, No. SC10-1295 (review granted Sept. 17, 2010). DCA decision: 40 So. 3d 18 (Fla. 5th DCA 2010). Status: decision pending; Oral Argument Video.

Economic Loss Rule – Professional Service:  Question Certified from the Eleventh Circuit Court of Appeals:  Does an insurance broker provide a “professional service” such that the insurance broker is unable to successfully assert the economic loss rule as a bar to tort claims seeking economic damages that arise from the contractual relationship between the insurance broker and the insured?  Tiara Condo. Ass’n v. Marsh & McLennan Cos., No. SC10-1022 (review granted June 4, 2010).  11th Cir. decision:  607 F.3d 742 (11th Cir. 2010).  Status:  decision pending; Oral Argument Video.

Negligence – Rear-End Collision.  In the case of a rear-end collision, does the rebuttable presumption that the negligence of the rear driver was the sole proximate cause of the accident, which requires the driver to overcome the presumption by proving that the lead driver stopped abruptly or arbitrarily, apply where the rear driver is the plaintiff? Cevallos v. Rideout, No. SC09-2238 (review granted Apr. 20, 2010).  DCA decision: 18 So. 3d 661 (Fla. 4th DCA 2009).  Status:  decision pending; Oral Argument Video

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Taxation – Ad Valorem. Question Certified: Whether section 196.199(2)(b), Florida Statutes, is inapplicable to the real property at issue because appellants are the equitable owners of that property? Accardo v. Gregory S. Brown, Property Appraiser for Santa Rosa County, No. SC11-1445 (review granted February 29, 2012). DCA decision 63 So. 3d 798. Status: briefing; Oral Argument to be set by separate order.

Taxation – Ad Valorem: Whether trial court properly determined that leasholders were equitable owners and subject to ad valorem taxes on their leasehold improvements. 108 Ariola, LLC v. Jones, No. SC11-2231 (review granted  February 29, 2012). DCA decision 71 So. 3d 892 (Fla. 1st DCA 2011). Status: briefing; no Oral Argument.

Property Taxes – Homestead Exemption for Non-U.S. Citizens: Whether two Honduran citizens who lawfully own and reside in a Miami condo with their three U.S. citizen minor children may claim the ad valorem homestead exemption on their condo because their children are U.S. citizens, reside in the condo and are dependent on their parents. De La Mora v. Andonie, No. SC11-554 (review granted June 30, 2011). DCA decision: 51 So. 3d 517 (Fla. 3d DCA 2010). Status: decision pending; Oral Argument Video.

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Insurance – Compulsory Medical Examination. Whether an insured’s refusal to comply with policy’s requirement that she submit to a compulsory medical exam constitutes her failure to satisfy a condition precedent to recovery pursuant to the underinsured/uninsured benefits in the insurance policy. The Fifth District reversed her award, reasoning that “[h]er refusal constitutes a breach of the policy that prohibits her recovery.” State Farm Mut. Auto. Ins. Co. v. Curran, No. SC12-157 (review granted February 29, 2012). DCA decision --- So. 3d ---, (Fla. 5th DCA 2011), Nos. 5D09-1488, 5D09-2091). Status: briefing; Oral Argument to be set by separate order.

Insurance – Public Adjusters. Is section 626.854(6), Florida Statutes, which bans solicitation by public adjusters for a period of 48 hours, narrowly tailored to meet its objectives, or is it a ban on all solicitation for 48 hours which is a restriction on commercial speech in violation of Article I, section 4 of the Florida Constitution? Atwater v. Kortum, No. SC11-133 (review granted May 13, 2011). DCA decision: 54 So. 3d 1012 (Fla. 1st DCA 2010). Status: decision pending; Oral Argument Video

First Party Insurance Liability - Claims Handling: Questions certified by Eleventh Circuit Court of Appeals: (1) "Does Florida law recognize a claim for breach of the implied warranty of good faith and fair dealing by an insured based on the insurer's failure to investigate and assess the insured's claim within a reasonable period of time?" (2) "If Florida law recognizes a claim for breach of the implied warranty of good faith and fair dealing based on an insurer's failure to investigate and assess its insured's claim within a reasonable period of time, is the good faith and fair dealing claim subject to the same bifurcation requirement applicable to a bad faith claim under Fla. Stat. Sec. 624.155?" (3) "May an insured bring a claim against an insurer for failure to comply with the language and type-size requirements established by Fla. Stat. Sec. 627.701(4)(a)?" (4) Does an insurer's failure to comply with the language and type-size requirements established by Fla. Stat. Sec. 627.701(4)(a) render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable?" and (5) "Does language in an insurance policy mandating payment of benefits upon 'entry of a final judgment' require an insurer to pay its insured upon entry of judgment at the trial level?"  Chalfonte Condo Apt. Ass'n v. QBE Ins. Corp., No. SC09-441 (review granted Mar. 11, 2009).  11th Cir. decision: 561 F.3d 1267 (11th Cir. 2009).  Status: decision pending; Oral Argument Video.

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Legislation – State University System: Do the statutes and provisions of the General Appropriations Act that restrict state universities’ expenditure or tuition and fees and condition appropriation of funds to each university upon compliance with the tuition and fee policies established by the Legislature contravene the authority of the Board of Governors under article IX, section 7(d) of the Florida Constitution to establish and expend tuition and fees? Graham v. Haridopolis, No. SC11-2453 (review granted Mar.15, 2012). DCA decision: 75 So. 3d 315 (Fla. 1st DCA 2011). Status: briefing; Oral Argument to be set by separate order.

Taxation – Ad Valorem. Question Certified: Whether section 196.199(2)(b), Florida Statutes, is inapplicable to the real property at issue because appellants are the equitable owners of that property? Accardo v. Gregory S. Borown, Property Appraiser for Santa Rosa County, No. SC11-1445 (review granted Feb. 29, 2012). DCA decision 63 So. 3d 798 (Fla. 1st DCA 2011). Status: briefing; Oral Argument to be set by separate order.

Municipal Corporations – Code Enforcement Liens. Question Certified: Whether, under Article VIII, section 2(b) of the Florida Constitution, section 166.021, Florida Statutes and Chapter 162, Florida Statutes, a municipality has the authority to enact an ordinance stating that its code enforcement liens, created pursuant to a code enforcement board order and recorded in the public records of the applicable county, shall be superior in dignity to prior recorded mortgages? City of Palm Bay v. Wells Fargo Bank, N.A., No. SC11-830 (review granted May 18, 2011). DCA decision:  67 So. 3d 271 (Fla. 5th DCA 2011). Status: decision pending; Oral Argument Video.

Dismissal – Sovereign Immunity.  Conflict and Question certified:  Whether, in light of the supreme court’s ruling in State Department of Education v. Roe, 679 So. 2d 756 (Fla. 1996), review of the denial of a motion to dismiss based on a claim of sovereign immunity should await the entry of a final judgment in the trial court?  Citizens Prop. Ins. Corp. v. San Perdido Ass’n, No. SC10-2433 (review granted Feb. 17, 2011).  DCA decision: 46 So. 3d 1051 (Fla. 1st DCA 2010).  Status: Decision pending: Oral Argument Video.

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There are no cases to report on at this time.

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Contracts - Implied Warranty of Habitability: Can a homeowners' association bring a claim for breach of common law implied warranties of fitness and merchantability - also referred to as a warranty of habitability - against a builder/developer for defects in roadways, drainage systems, retention ponds, and underground pipes in a residential subdivision or are such claims required to be brought by individual homeowners.  Lakeview Reserve Homeowners Ass'n, Inc. v. Moranda Homes, Inc., Nos. SC10-2292 & SC10-2336 (review granted Apr. 20, 2011).  DCA decision: 48 So. 3d 902 (Fla. 5th DCA 2010).  Status:  decision pending; Oral Argument Video.

Enforcement of Contract – Unlicensed Contractor: Does Florida Statutes § 489.128, which prevents an unlicensed contractor from enforcing a contract preclude other parties to the contract from enforcing the contract against the unlicensed contractor? Earth Trades Inc. v. T&G Corp., No. SC10-1892 (review granted Oct. 21, 2011). DCA decision: 42 So. 3d 929 (Fla. 5th DCA 2010). Status: decision pending; Oral Argument Video.

Statute of Frauds – Estoppel.  Where a seller orally promises to extend a contractual due diligence period, despite the fact that the initial contract mandates that all binding modifications be in writing, can the court apply equitable estoppel to prevent the seller from relying on the statute of frauds?  DK Arena, Inc. v. EB Acquisitions I, LLC, No. SC10-897 (review granted Nov. 5, 2010).  DCA decision: 31 So. 3d 313 (Fla. 4th DCA 2010).  Status: decision pending; Oral Argument Video.

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Statute of Frauds – Arbitration. Question Certified: Does section 95.011, Florida Statutes apply to arbitration when the parties have not expressly included a provision in their arbitration agreement stating that it is applicable? Raymond James Fin. Servs., Inc. v. Phillips, No. SC11-2513 (review granted January 27, 2012). DCA decision: 2011 WL 5555691, 36 Fla. L. Weekly D2479a (Fla. 2d DCA Nov. 16, 2011). Status: briefing, Oral Argument to be set by separate order.

Negligence – Duty to Inspect --- New Trial. Did the trial court abuse its discretion in granting a new trial on the basis that the jury verdict in favor of defendant was contrary to the manifest weight of the evidence where review of the record reveals substantial conflicting evidence concerning reasonableness of the defendant’s inspection of a backhoe loader and its breaking system? Did trial court abuse its discretion in granting new trial based on defense counsel’s references to the exculpatory language in the consumer service agreement during closing arguments where plaintiff failed to object or move for a mistrial and where argument failed to rise to the level of fundamental error because the argument was not improper, harmful, incurable or damaging? Rosier v. Ring Power Corp., No. SC11-1641 (review granted March 23, 2012). DCA decision: 67 So. 3d 1115 (Fla. 1st DCA 2011). Status: briefing; Oral Argument to be set by separate order.

Medical Malpractice – Limitation of Actions. Is a complaint untimely filed when the plaintiff has purchased a 90-day extension of the statute of limitations pursuant to § 766.104(2), Fla. Stat., and when negotiations are cut off with less than 60 days remaining of the statute of limitations, but the complaint is not filed until 78 days later? Patrick v. Gatien, SC11-1466 (review granted Feb. 7, 2012). DCA decision: 65 So. 3d 42 (Fla. 1st DCA 2011). Status: briefing; Oral Argument to be set by separate order.

Discovery of Corporate Financial Documents: Whether a corporation seeking damages relating to the purchase of state-owned real estate and suing for negligent misrepresentation, fraud in the inducement, unjust enrichment and reformation of a purchase contract can be compelled to produce corporate financial records dating several years after the purchase date in question. Am. Educ. Enters., LLC v. Bd. of Trs. of the Int’l Improvement Trust Fund, No. SC10-2251 (review granted June 28, 2011). DCA decision: 45 So. 3d 941 (Fla. 3d DCA 2010). Status: decision pending; Oral Argument Video.

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There are no cases to report on at this time.

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Litigation Privilege.  Is an attorney protected by the litigation privilege against claims for defamation and tortious interference when he related to another party’s ex-spouses and former business associates that the party utilized prostitutes to entice business clients and that the party was being prosecuted for prostitution? Del Monico v. Traynor, No. SC10-1397 (review granted Nov. 12, 2010). DCA decision: 47 So. 3d 1287 (Fla. 4th DCA 2010). Status: decision pending; Oral Argument Video

Dental Malpractice – Physician’s Right to Confer with Attorney. Does allowing a treating physician to consult with his or her own attorney prior to being deposed violate the patient confidentiality statute? Hasan v. Garvar, No. SC10-1361 (review granted Jan. 21, 2011). DCA decision: 34 So. 3d 785 (Fla. 4th DCA 2010). Status: decision pending; Oral Argument Video

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Statute of Frauds – Arbitration. Question Certified: Does section 95.011, Florida Statutes apply to arbitration when the parties have not expressly included a provision in their arbitration agreement stating that it is applicable? Raymond James Fin. Servs., Inc. v. Phillips, No. SC11-2513 (review granted January 27, 2012). DCA decision:  2011 WL 5555691, 36 Fla. L. Weekly D2479a (Fla. 2d DCA Nov. 16, 2011). Status: briefing; Oral Argument to be set by separate order.

Medical Malpractice – Wrongful Death. Is an arbitration clause in a doctor-patient financial agreement which required all disputes relating to diagnosis, treatment, or care of patient be resolved by arbitration, limited non-economic damages and required compliance with the presuit notice requirements contrary to the public policy embodied in Chapter 766? Franks v. Bowers, No. SC11-1258 (review granted Nov. 8, 2011). DCA decision: 62 So. 3d 16 (Fla. 1st DCA 2011). Status: briefing complete; Oral Argument scheduled for June 5, 2012.

Fraud – Arbitration. Conflict Certified: Was an arbitration clause in a real estate contract applicable to plaintiff's action alleging that plaintiff's decision to purchase property was based on defendant's fraudulent misrepresentation in an advertisement that a "wetlands study verifies no wetlands" where the fraud claim was not significantly related to the contract.  Jackson v. Shakespear Foundation, Inc., No. SC11-1196 (review granted Nov. 8, 2011). DCA decision: 61 So. 3d 1194 (Fla. 1st DCA 2011). Status: briefing; Oral Argument scheduled for June 5, 2012.

Nursing Homes – Arbitration Clause. Question Certified: Does the execution of a nursing home arbitration agreement by a party with the capacity to contract, bind the patient’s estate and statutory heirs in a subsequent wrongful death action arising from an alleged tort within the scope of an otherwise valid arbitration agreement? Laizure v. Avante at Leesburg, Inc., No. SC10-2132 (review granted Dec. 14, 2010). DCA decision: 44 So. 3d 1254 (Fla. 5th DCA 2010). Status: briefing complete; no Oral Argument.

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Certiorari – Sovereign Immunity. Conflict Certified: The Third DCA acceptedjurisdiction over a governmental entity's claim that it is immune from suit, rather than it is not liable for lack of duty, and in so doing certified conflict with the decisions in Florida A & M University Board of Trustees v. Thomas, 19 So. 3d 445 (Fla. 5th DCA 2009), and Pinellas Suncoast Transit Authority v. Wrye, 750 So. 2d 30 (Fla. 2d DCA 1996). Rodriguez v. Miami-Dade County, No. SC11-1913 (review granted Dec. 1, 2011). DCA decision 67 So. 3d 1213 (Fla. 3d DCA 2011). Status: briefing; Oral Argument to be set by separate order.

Dismissal – Sovereign Immunity.  Conflict and Question certified:  Whether, in light of the supreme court’s ruling in State Department of Education v. Roe, 679 So. 2d 756 (Fla. 1996), review of the denial of a motion to dismiss based on a claim of sovereign immunity should await the entry of a final judgment in the trial court?  Citizens Prop. Ins. Corp. v. San Perdido Ass’n, No. SC10-2433 (review granted Feb. 17, 2011).  DCA decision: 46 So. 3d 1051 (Fla. 1st DCA 2010).  Status: Decision pending; Oral Argument Video

Certiorari – Interlocutory Review on Issue of Immunity.  Is a city bus driver sued for negligence in striking a pedestrian entitled to interlocutory review by certiorari of the denial of his summary judgment on grounds of immunity?  Keck v. Eminisor, No. SC10-2306 (review granted Dec. 30, 2010).  DCA decision: 46 So. 3d 1065 (Fla. 1st DCA 2010).  Status: Decision pending; Oral Argument Video.

*Certiorari – Administrative Order.  Question Certified: May a district court grant common law certiorari relief from a circuit court’s opinion reviewing an administrative order when the circuit court applied precedent from another district court but the reviewing district court concludes that the precedent misinterprets clearly established statutory law?  Dep't of Highway Safety & Motor Vehicles v. Nader, No. SC09-1533 (review granted May 7, 2010).  DCA decision: 4 So. 3d 705 (Fla. 2d DCA 2009).  Status:  Decision below approved.; Slip Opinion; Motion for rehearing denied on May 4, 2012).

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Can a California trial court reduce a personal injury plaintiff's recovery for medical expenses to reflect the amount actually paid by his health insurer?  That question matters a lot to attorneys, parties and insurers, trying to value claims and where appropriate, seek settlements in thousands of cases every day.

For twenty years, the answer under California law was "yes," as held in Hanif v. Housing Authority (1988) 200 Cal.App.3d 635 and Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4th 298.  In November, California's Fourth District Court of Appeal held that the answer was "no."  Howell v. Hamilton Meats & Provisions, Inc. [pdf] (2009) 179 Cal.App.4th 686.

On March 10, 2010, the California Supreme Court agreed to review Howell and resolve the conflict.  By virtue of the Court's order, Howell is automatically depublished and non-citable, making Hanif and Nishihama the only precedent on this important question until the Supreme Court speaks in Howell.

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A party in case before the Texas Supreme Court grew so frustrated by waiting for an opinion almost three years after oral argument that it sued the justices in federal court, alleging due process violations. Coincidentally (or not) the Supreme Court issued an opinion eight days later.

The court heard oral arguments in Southwestern Bell Tel. Co. v. Marketing on Hold, Inc. in March, 2007. The case was an interlocutory appeal of a class certification order entered in litigation challenging Southwestern Bell's right to charge certain municipal fees. The issues on appeal centered on whether Marketing on Hold, a phone bill auditing firm that had an taken assignment of rights as part of its fee to its business customers had standing in the case and whether it constituted an "adequate" class representative.

The parties had heard nothing further from the case by February, 2010. Marketing on Hold took the unusual step of of suing the justices of the Texas Supreme Court in a federal district court in Austin. It argued that the lengthy delay in rendering a decision would cause documentary evidence to be lost and the memory of witnesses to fade, thereby violating its federal due process rights. The case sought only declaratory relief.

Only eight days after the suit was filed the Supreme Court issued its opinion in the case, No. 05-0748, February 19, 2010. The court held that the assignment of rights was valid and conferred standing on Marketing On Hold. Nevertheless, because Marketing On Hold had only a fractional interest in the claim by virtue of its assignment, it had an incentive to settle for less consideration and to minimize its own expenses. It was not, therefore, an adequate class representative. The certification order was reversed. The case divided the court, 5-3.

The frustration of litigants involved in seemingly interminable proceedings is understandable. The tactic of suing an appellate court to force an opinion is both extreme and likely to be ineffective. Not only is a federal district court extremely unlikely to intervene in the internal procedures of a state appellate court, the suit is apt to make a bad impression on the appellate court justices. As Marketing On Hold learned, "be careful what you wish for..."

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The California Supreme Court's website is a veritable goldmine of information. Unfortunately, it's not organized in a way that allows lawyers and clients to easily track issues the court has accepted for decision. We were the first site to regularly provide comprehensive and up to date information on all civil cases.  The Appellate Strategist has organized the pending issues according to subject matter. We will update periodically, as new reviews are granted, or opinions issue on old ones. Hope it's useful. (Updated through 5/4/12)

• Employment – Compensation & Benefits
• Employment – Other
• Insurance
• Torts & Products
• ADR
• Attorney-Related
• Damages
• B & P 17200/Class Actions/Commercial
• Appeals & Writs
• Civil Procedure/Evidence/Discovery
• Environmental
• Civil Rights
• Taxation and Assessments
• Other

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The Illinois Supreme Court has published its docket book for the March term, and the Court’s docket call will be heavy on civil matters this month in Springfield. 

On March 10, the Court will hear argument in Founders Insurance Co. v. Munoz, which involves the entitlement exclusion in personal automobile insurance policies, and Speed District 802 v. Warning, which involves an unfair labor practices charge arising out of the termination of a teacher’s contract.  The next day, the Court hears Pekin Insurance Co. v. Wilson, which presents issues of the scope of evidence relevant to an insurer’s duty to defend, Krywin v. Chicago Transit Authority, which relates a common carrier’s potential duty to clear away natural accumulations of snow and ice, and Clerk v. The Children’s Memorial Hospital, which involves the scope of Illinois’ cause of action for wrongful birth.

On March 16, the Court will hear argument in Baumgartner v. Baumgartner.  There, the principal issue is whether incarceration is an act of self-emancipation terminating the support obligation in a divorce decree.  The Court will also hear K. Miller Construction Co. v. McGinnis, which involves the construction of the Home Repair and Remodeling Act.  Finally, on March 17, the Court hears Cwik v. Giannoulias, a putative class action alleging that the state’s practice of not paying over interest or income earned by reclaimed property while in the state’s custody is an unconstitutional taking of property without compensation.

Decisions in each of these cases should come later in the year.

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[UPDATED THROUGH May 14, 2012]

Goodman v. Ward

Supreme Court Case Number: 109796

Appellate Court: Third District

Appellate Court Case Number: 3-09-1031

Issue Presented: Is a candidate for a judgeship in a particular judicial subcircuit required to be a resident of that subcircuit on the date the candidate petitions to have his or her name placed on the primary ballot?

Appellate Court Opinion Summary: Petitioner challenged the listing on the primary ballot of a candidate for Circuit Court Judge of the Twelfth Judicial Circuit, Fourth Subcircuit. Petitioner argued that the candidate’s lack of residency within the subcircuit made him ineligible as a candidate pursuant to Article VI, Section 12 of the Illinois Constitution, which requires that a candidate be a “resident of the unit which selects him.” Following Thies v. State Board of Elections, 124 Ill.2d 317 (1988) and Maddux v. Blagojevich, 233 Ill.2d 508 (2009), the court held that when a judgeship concerns a portion of a circuit, a candidate must be a resident in that portion at the time of filing his or her nomination papers. Justice Wright dissented.

Citation to Opinion: 2010 WL 184081

Jackson v. The Board of Election Commissions of the City of Chicago

Supreme Court Case Number: 111928

Appellate Court: First District, Division Four

Appellate Court Case Number: 1-11-0361

Issue Presented: Are property taxes a "tax or other indebtedness due to the municipality" within the meaning of 65 ILCS 5/3.1-10-5(b), which provides that certain facts disqualify a candidate for an elective municipal office?

Appellate Court Opinion Summary: Appellee filed nominating papers to run as a candidate for Chicago City alderman. An objector's petition charged that appellee was not eligible to run because she was in arrears for back property taxes, and thus owed a "tax or other indebtedness due to the municipality" within the meaning of 65 ILCS 5/3.1-10-5(b). Relying upon a letter from the city of Chicago indicating that the city did not find a record of certain outstanding debts, the hearing officer overruled the objection, and the Board of Elections agreed. The objector appealed to the Circuit Court, which affirmed the Board of Elections. The Appellate Court found that the Electoral Board's decision was clearly erroneous and reversed. On appeal, appellee argued that because the city of Chicago would have no standing to enforce a judgment for unpaid property taxes, there was no "indebtedness due" to the city of Chicago. The Appellate Court disagreed, finding that the plain language of the statute provided that although property taxes were collected by the Cook County collector, the money was due to the city. The Court held that the city would have standing to enforce payment of its property taxes. The letter received by appellee from the city was not dispositive, the Court held, because city property taxes were collected through the county collector.

Appellate Court Opinion 

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[UPDATED THROUGH May 14, 2012]

In re Marriage of Coulter

Supreme Court Number: 113474

Appellate Court: Third District

Appellate Court Case Number: 3-11-0424

Issue Presented: May a trial court deny a petitioner's request for a preliminary injunction barring removal of the couple's minor children, pending a full hearing, where the parties had previously agreed that the wife could remove the children from the state at any time after 36 months from entry of judgment?

Appellate Court Opinion Summary: Petitioner and respondent entered into a joint parenting agreement following their divorce. The parties agreed that respondent could remove the children from the state at any time after 36 months from the entry of judgment. Petitioner subsequently filed an emergency petition for a preliminary injunction barring respondent from removing the children from the state, pending a hearing on whether removal was in the best interest of the children. The trial court denied the petition. The Appellate Court reversed. Pursuant to Section 501(a)(2) of the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5/501(a)(2), either party in a marriage case may move for a preliminary injunction to enjoin a party from removing a child from the state of Illinois. A custodial parent who wishes to remove his or her minor children from the state must first obtain leave of court. 750 ILCS 5/609(a). Court approval is required even when the parties have previously consented to removal. The Court held that petitioner had demonstrated all necessary factors to prove his entitlement to an injunction. 

Link to Opinion 

In re Marriage of Mathis

Supreme Court Number: 113496

Appellate Court: Fourth District

Appellate Court Case Number: 4-11-0301

Issue Presented: In a bifurcated dissolution proceeding, when a grounds judgment has been entered, and when there is a lengthy delay between the date of entry of the grounds judgment and the hearing on ancillary issues, is the appropriate date for valuation of marital property the date of dissolution or a date as close as practicable to the date of trial of the ancillary issues?

Appellate Court Opinion Summary: In 2001, the trial court awarded the parties a judgment of dissolution, reserving a ruling on ancillary issues. In April 2004, the trial court commenced the hearing on ancillary issues. The petitioner filed a motion in limine to establish the valuation date of the marital property in November 2005. The court ultimately set the valuation date as January 1, 2006. In October 2010, respondent filed a motion to change the valuation date. After a hearing, the court set a new valuation date of December 31, 2010, but later certified the order pursuant to Supreme Court Rule 308. The Appellate Court affirmed, finding that property should be valued in a dissolution proceeding as of the date of trial on the property distribution matter, or as close thereto as practicable. 750 ILCS 5/503(f). The court declined to find either a patent or latent ambiguity in the language of the statute. Justice Appleton specially concurred, agreeing with the judgment but expressing his concern that the court's ruling will promote gamesmanship.

Link to Opinion

In re Marriage of McGrath

Supreme Court Number: 112792

Appellate Court: First District, Second Division

Appellate Court Case Number: 1-10-2119

Issue Presented: Are regular withdrawals from a savings account "income" within the meaning of the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5/505, for application of the presumptive 28% child support obligation?

Appellate Court Opinion Summary: Petitioner sought child support and other relief. Respondent testified that he was currently unemployed and lived off the assets that were awarded to him as part of the marital estate, withdrawing about $8,500 per month from his savings account. The court ordered respondent to pay $2,000 per month in child support, and he appealed. The Appellate Court affirmed, holding that respondent's withdrawals constituted "income" within the meaning of the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5/505, and therefore were subject to the presumptive 28% child support obligation. The Appellate Court further rejected respondent's argument that his "income" was limited to the interest from his savings accounts.

Link to Opinion

Karbin v. Karbin

Supreme Court Number: 112815

Appellate Court: First District, Sixth Division

Appellate Court Case Number: 1-10-1545

Issue Presented: May a guardian file and prosecute a petition for divorce his- or herself once a spouse's counterpetition has been dismissed, as opposed to one originated by the ward before incompetency?

Appellate Court Opinion Summary: Respondent wife suffered brain damage after a car accident. Although petitioner husband was guardian for a time, he eventually was forced to relinquish guardianship due to the onset of Parkinson's disease. After the transfer of authority, wife left Illinois with her daughter and new guardian. Husband filed a petition for dissolution of the marriage, and later, wife (through her guardian) filed a counterpetition. Husband eventually filed a voluntary request to dismiss his petition, which was granted, and moved to dismiss and strike his wife's petition - which was also granted. The trial court granted husband's request to dismiss, and dismissed the wife's petition as well.  The Appellate Court affirmed, holding that under In re Marriage of Drews, 115 Ill.2d 201, 203-04 (1986), a plenary guardian of a disabled adult lacks standing to maintain an action for the dissolution of a ward's marriage. The majority rejected a line of authority holding that such decisions could be made by the guardian only following a best interest hearing. Justice Cahill dissented, arguing that the case should be remanded to the trial court with instructions to determine whether the counterpetition was in the best interest of the ward.

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[UPDATED THROUGH May 14, 2012]

Carr v. Koch

Supreme Court Number: 113414

Appellate Court: Fourth District

Appellate Court Case Number: 4-11-0117

Issue Presented: Do plaintiffs have standing to challenge the Illinois education funding system as a violation of the equal protection clause of the Illinois constitution?

Appellate Court Opinion Summary: General state financial aid to schools is intended to supplement local resources devoted to public education. The State calculates what percentage of the Foundation Level a school can achieve without state aid. This is done by calculating a district's Available Local Resources - if that is less than 93% of the Foundation Level, the state provides financial aid sufficient to raise the district to that level. If Available Local Resources are 93-175% of the Foundation Level, the state provides aid on a sliding scale. If Available Local Resources exceed 175% of the Foundation level, the state provides a fixed grant. Plaintiffs filed suit, alleging that the state's education funding system required taxpayers in school districts with low property values to pay property taxes at a higher rate than similarly situated taxpayers in higher-property-value districts. Plaintiffs argued that the unequal treatment was not rationally related to any legitimate legislative purpose. According to plaintiffs, since the Supreme Court's decision in Committee for Educational Rights v. Edgar, 174 Ill.2d 1 (1996), the General Assembly has asserted effective state control over the core education functions in Illinois public schools. The trial court dismissed, holding that local variations in assessment rates could not be firmly traceable to the defendants, and that the action was barred by the State Lawsuit Immunity Act, 745 ILCS 5/0.01 et seq.   The Appellate Court affirmed, noting that individual school districts are free to impose higher or lower tax rates than those used to calculate Available Local Resources without any impact on their state funding; tax rates imposed by the local school districts are in no way obligated by the state funding scheme. Further, the court found that the requested relief -- a declaration that the state funding scheme was unconstitutional -- would not redress the plaintiffs' claimed injury because it would likely result in higher, not lower, tax rates in order to compensate for loss of state aid.

Hope Clinic for Women, Inc. v. Adams

Supreme Court Number: 112673 & 112704

Appellate Court: First District, Sixth Division

Appellate Court Case Number: 1-10-1463 & 1-10-1576

Issue Presented: Did the trial court properly dismiss an action challenging the constitutionality of the Illinois Parental Notice of Abortion Act, brought solely under state law, on the grounds that the plaintiffs' equal protection and due process claims were barred by collateral estoppel, and the plaintiffs' privacy claim was barred because Federal privacy law would require dismissal, and state privacy protections were interpreted in lockstep with Federal law?

Appellate Court Opinion Summary: Plaintiffs challenged the constitutionality of the Illinois Parental Notice of Abortion Act, 750 ILCS 70/1, under state law. The Act places on physicians the responsibility of disclosing to a parent, grandparent, stepparent living in the household or legal guardian the fact that his or her minor or incompetent child is seeking an abortion. No notice is required, on the other hand, when a minor child chooses to continue her pregnancy, even when she has been adjudicated incompetent, the pregnancy endangers her life or health, she is homeless, the resulting child will be severely disabled, or the minor seeks to give the child up for adoption. The Act contains no exception for rape or incest, unless it was committed by a parent, guardian, grandparent or stepparent living in the household. Nor is any exception provided if the minor's parent or guardian sexually or physically abused someone else in the minor's household. The plaintiffs alleged that the Act violated the state privacy clause, the due process clause, the equal protection clause, and the gender equality clause. The trial court dismissed the action with prejudice, finding that although plaintiffs had provided compelling evidence that parental notification would often expose minors to increased risks and anxieties, the claims were barred by various earlier decisions. The Appellate Court reversed. The Court held that the decision on which the lower court's finding of collateral estoppel was based, Zbaraz v. Hartigan,572 F.3d 370 (7th Cir. 2009), in fact resolved only a narrow facial due process challenge to the Act's judicial bypass provisions. Since the due process issue in Zbaraz was not identical to the plaintiffs' as-applied challenge, and since the equal protection claim there had not been adjudicated at all, the Court found that no collateral estoppel was raised. The Court next reversed the trial court's dismissal of the state privacy clause claim, finding that since Illinois has an express privacy clause, Federal constitutional law on privacy did not necessarily apply to Illinois-based claims, either with respect to the constitutionally guaranteed right to choose abortion or the right against disclosure of medical information. The Court also noted that where Federal privacy claims have been subjected to a variety of judicial review standards, Illinois law has a mandated standard for such claims -- reasonableness. Finally, the Court reversed the trial court's dismissal of the plaintiffs' gender equality claim, finding that the Act arguably discriminates based on gender in two ways: (1) by permitting minor males to make decisions endangering the life of a child without parental notification, but denying that right to minor females; and (2) by permitting minor females who were, or had ever been, married, to elect abortion without parental notification, while denying that right to minor females who had never been married. Justice McBride dissented only with respect to the reversal on the gender equality claim. Presiding Justice Garcia specially concurred with the result, but found that reversal was mandated on the substantially narrower grounds that the trial court had erroneously found its result to be mandated by earlier precedent.  

In re Torski C.

Supreme Court Case Number: 109623

Appellate Court: Fourth District

Appellate Court Case Number: 4-08-0952

Issue Presented: Is the definition of "dangerous conduct" found in the involuntary commitment statute void for vagueness?

Appellate Court Opinion Summary: Respondent was involuntarily committed to a mental health facility pursuant to Sections 1-104.5 and 1-119 of the Mental Health and Developmental Disabilities Code.  405 ILCS 5/1-104.5, 1-119.  Section 1-119 permits the involuntary commitment of any individual who is reasonably expected to engage in "dangerous conduct" which might include either threatening behavior or conduct that places the person or another in reasonable expectation of being harmed.  Section 1-104.5 defines "dangerous conduct" as including conduct placing another individual in "reasonable expectation of being harmed," or a person's inability to guard himself or herself from serious harm because of his or her inability to provide for his or her basic physical needs.  The Appellate Court held that the "reasonable expectation" language was unconstitutionally vague because it could be interpreted to apply to conduct that does not justify the deprivation of a liberty interest.  This was so because, as written, the statute arguably applied to "the entire gamut of psychological, emotional, or financial harm, regardless of severity," and because the statute "poses a risk of arbitrary application to mentally ill individuals engaging in merely unusual or annoying behavior."  The statutory definition for involuntary commitment was also problematic because -- inasmuch as the commitment standard was looser than the one applying to involuntary administration of psychotropic medications -- the statute created the possibility of an individual who could be admitted, but not treated.

Citations to Opinion: 395 Ill.App.3d 1010, 335 Ill.Dec. 405, 918 N.E.2d 1218

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[UPDATED THROUGH May 14, 2012]

Bonhomme v. St. James

Case Number: 112393 & 112398

Appellate Court: Second District

Appellate Court Case Number: 2-10-0036

Issues Presented: (1) Should the tort of fraudulent misrepresentation be extended to a largely personal setting on the facts pleaded? (2) Did the plaintiff plead justifiable reliance sufficient to reach a jury?

Appellate Court Opinion Summary:   Plaintiff alleged that defendant had impersonated a fictional male personality, as well as more than twenty equally fictional friends of the male personality, during an online relationship. Plaintiff sued defendant for intentional and negligent infliction of emotional distress, defamation per se and per quod, negligent defamation, fraudulent misrepresentation, and false light. The trial court dismissed all counts with prejudice except fraudulent misrepresentation, which was dismissed without prejudice. Plaintiff filed an amended complaint, purporting to reallege her claim for fraudulent misrepresentation, which the trial court then dismissed.  The Appellate Court held that plaintiff had abandoned all claims which she declined to reallege in her Third Amended Complaint. On appeal, the Appellate Court concluded that the facts presented an appropriate case for extending the tort of fraudulent misrepresentation beyond the commercial context, since the plaintiff alleged that she had sustained economic losses. The Court further found that on the facts pleaded, a jury could permissibly find that the plaintiff's reliance was justified. Justice Schostok dissented in part, arguing that the tort should not be expanded to the facts pleaded, and that the plaintiff could not prove justifiable reliance as a matter of law.

Choate v. Indiana Harbor Belt Railroad Co.

Supreme Court Number: 112948

Appellate Court: First District, First Division

Appellate Court Case Number: 1-10-0209

Issues Presented: (1) Does a defendant landowner have a duty of due care with respect to a nearly thirteen-year old injured while trying to jump aboard a slow-moving train on the landowner's tracks? (2) Was the expert opinion presented by plaintiff sufficient to support the jury's verdict on the grounds that improvements were reasonably practicable and would have prevented the accident? 

Appellate Court Opinion Summary: The minor plaintiff was injured while attempting to jump aboard a moving freight train traveling 9 to 10 miles per hour. The jury returned a verdict in favor plaintiff for $6.5 million, and held plaintiff 40% comparatively negligent. The Appellate Court affirmed. The Court noted that the question of whether a duty was owed to a landowner only if he "knows or should know that children frequent the premises and if the cause of the child's injury was a dangerous condition on the premises." There is both an objective and subjective test for determining whether a danger is obvious to a trespassing child. Under the objective test, a danger is obvious where children of similar age and experience would appreciate it. Under the subjective test, a danger is obvious where the child has some greater understanding of the alleged danger than would a typical minor of his age. The Court held that the question of whether the danger involved in the moving train was one which would be obvious to children of similar age and experience was one of fact for the jury. The Court further held that the evidence was sufficiently conflicting with respect to the subjective test to necessitate upholding the jury verdict. Viewed in the light most favorable to the plaintiff, the Court held that plaintiff's expert was sufficient for the jury to find that fencing would have prevented plaintiff from trying to jump aboard the moving train. Further, plaintiff's expert's analysis would not have required defendant to fence its entire right-of-way, nor were the proposed improvements prohibitively expensive. Finally, the Court rejected various evidentiary rulings by the Circuit Court.

Link to Opinion

Doe v. White

Supreme Court Number: 112479 & 112501

Appellate Court: Fourth District

Appellate Court Case Number: 4-10-0137 & 4-10-0138

Issue Presented: Did defendant school district and its various administrators owe a tort duty of care to protect students in a different district when they allegedly failed to report sexual abuse involving a school teacher, instead allegedly creating a falsely positive letter of recommendation for the perpetrator and falsifying a verification of teaching experience form to conceal the abuse?

Appellate Court Opinion Summary: Defendant teacher -- who was subsequently convicted of molesting students in two school districts -- was accused of sexually abusing the two minor plaintiffs. Plaintiffs alleged that prior to the alleged abuse, administrators in the first school district had learned of the teacher's conduct, and sought his resignation from their district. Plaintiffs alleged that: (1) no one at the first school district had reported teacher's abuse to the Illinois Department of Children and Family Services; (2) one of the individual administrators at the first district had created a falsely positive letter of recommendation for the teacher; (3) individual administrators at the first district had entered into a severance agreement with the teacher which concealed the abuse; (4) individual administrators had falsified information on the verification of teaching experience form submitted by the second district -- where plaintiffs were students -- to the first district; and (5) individual administrators at the first district had failed to inform the second district of the teacher's misconduct when the teacher sought a job with the second district. Plaintiffs sued both school districts and various administrators. At issue are plaintiffs' allegations against the teacher's original employer, the first school district, and its administrators: (1) willful and wanton misconduct, including failure to report the teacher's conduct to the state and instead "passing" him to the district where plaintiffs were students; (2) respondeat superior; (3) fraudulent concealment; (4) conspiracy; and (5) breach of fiduciary duties of trust. The trial court dismissed, finding that pursuant to the "public duty rule," defendants owed no duty to the plaintiffs, particularly since plaintiffs had never been students in the first district's schools. The court further found that no cause of action existed for "passing" of abusive teachers, and that plaintiffs' cause of action for fraud failed for lack of any pecuniary loss. Plaintiff entered an order pursuant to Supreme Court Rule 304, permitting interlocutory appeal. The Appellate Court reversed. The Court found that the public duty rule merely applied to allegations that government officials or employees had negligently performed their ordinary duties. Here, in contrast, the defendants allegedly engaged in intentional egregious conduct. Turning to Sections 324A and 311 of the Restatement (Second) of Torts, the Court held that the defendants had created a duty of care to plaintiffs through a voluntary undertaking by allegedly creating a false letter of recommendation for the teacher, and falsifying a verification of teaching experience form. The Court further noted that the Tort Immunity Act was not available to defendants in the action. Finally, the Court commented that the "state-created danger" doctrine -- which has not been recognized by any Illinois appellate court -- might be applicable. The state-created danger doctrine creates a constitutional duty to protect a person against injuries inflicted by a third party when the government affirmatively places the person in a position of danger he or she would not otherwise have faced, and does so through conduct which shocks the conscience.

Link to Opinion

Hernandez v. Bernstein

Supreme Court Number: 113054

Appellate Court: First District, Fifth Division

Appellate Court Case Number: 1-10-2646

Issues Presented: (1) Is an action for legal malpractice based on one factual theory one claim for purposes of res judicata, or two? (2) Does a plaintiff's voluntary dismissal of the remainder of his claim render the trial court's order dismissing one of plaintiff's factual theories final for purposes of res judicata?

Appellate Court Opinion Summary: Plaintiffs sued defendants for legal malpractice in connection with their representation of Jesse in connection with injuries he sustained at work. Plaintiffs alleged that defendants should have advised Jesse to sue various others, aside from his employer. The defendants moved to dismiss, arguing that the underlying third parties claims were already barred by the statute of limitations by the time defendants' representation began, and the trial court agreed, dismissing the claims without prejudice. Plaintiffs amended, alleging that defendants should have advised Jesse to sue his previous lawyers, and reasserting their previous time-barred claims. The trial court refused to dismiss, but in April 2009, the plaintiffs voluntarily dismissed their action without prejudice. Five months later, the plaintiffs refiled, reasserting their claims relating to the previous lawyers, and their time-barred claims. The trial court dismissed the claim with prejudice as barred by res judicata. The Appellate Court reversed. The plaintiffs claimed that they had alleged two separate negligence theories -- failure to sue third parties, and failure to sue the previous lawyers -- but the Appellate Court held that the plaintiffs had alleged a single claim for legal negligence. The Court found that dismissal of certain allegations under a single theory of recovery does not terminate litigation between the parties on the merits. The Court distinguished Hudson v. City of Chicago, 228 Ill.2d 462 (2008) and Rein v. David A. Noyes & Co., 172 Ill.2d 325, 334 (1996), holding that the plaintiffs' voluntary dismissal of their suit merely rendered all otherwise final orders appealable -- it did not render any nonfinal orders appealable.

Howell v. Dunaway

Supreme Court Case Numbers: 110199, 110200

Appellate Court: Fifth District

Appellate Court Case Number: 5-09-0071, 5-09-0072

Issue Presented: Is a hospital’s statutory lien for services, filed pursuant to the Health Care Services Lien Act, 770 ILCS 23/1, subject to a reduction under the common fund doctrine for attorney fees incurred by the injured plaintiff?

Appellate Court Opinion Summary: Both plaintiffs were injured in motor vehicle accidents, and sued the tortfeasors. The hospitals filed liens against any recovery pursuant to the Health Care Services Lien Act, 770 ILCS 23/1. After settling the personal injury actions, the plaintiffs filed petitions to adjudicate the liens, seeking to apply a one-third reduction in the amount of the liens to account for attorney fees incurred. The Circuit Court agreed with plaintiffs, applied the common fund reduction, and entered judgment, and the hospitals appealed. On appeal, the hospitals argued that the common fund rule was inapplicable to liens under the Act pursuant to the Supreme Court’s decision in Maynard v. Parker, 75 Ill.2d 73 (1979), on the grounds that plaintiffs’ debt to the hospitals was not dependent on the creation of the fund. The Appellate Court affirmed the judgment, holding that the Supreme Court had expanded the common fund rule to lienholder hospitals in a later decision, Bishop v. Burgard, 198 Ill.2d 495 (2002).

Citations to Opinion: 924 N.E.2d 1190, 338 Ill. Dec. 664

Lawlor v. North American Corporation of Illinois

Supreme Court Number: 112530

Appellate Court: First District, Fourth Division

Appellate Court Case Number: 1-09-3603

Issue Presented:

Appellate Court Opinion Summary: Plaintiff and her former employer filed cross-claims against each other. Defendant sued for breach of the duty of loyalty by attempting to steer business to a prospective employer, and unauthorized disclosure of confidential corporate sales information. Plaintiff sued for the "intrusion upon seclusion" tort. Both sides prevailed; employer recovered $78,781 in compensatory and $551,467 in punitive damages in a bench trial, and plaintiff recovered $1.75 million in punitive and $65,000 in compensatory damages in a jury trial. The parties cross-appealed. Defendant, the former employer, contended that it was not liable as the principal of the private investigator who had obtained plaintiff's private phone records. Plaintiff argued that the court had erroneously found in employer's favor on the breach of duty of loyalty claim, and had abused its discretion in reducing the award of punitive damages. Plaintiff was a commission-based salesperson for defendant from 1998 to 2005. Beginning in 2001, she signed an agreement providing that she would be compensated by 30% of gross profits generated for defendant. In late 2004 and early 2005, she met several times with a consultant about a potential new contract for her defendant. When defendant first pushed her aside from a lead role with that contract, and then attempted to change her compensation agreement, plaintiff resigned. In the months that followed, plaintiff became aware that she was being shadowed by investigators. After several months, she joined a new employer; she told no former clients where she was going, and none followed her from defendant to her new job. The Appellate Court affirmed the judgment for plaintiff with respect to intrusion upon seclusion, finding that defendant's attorneys had conceded that the private investigators were defendant's agents for purposes of respondeat superior, and that the evidence supported such a finding anyway. Next, the Court rejected defendant's argument that the award of $1.75 million in punitive damages was constitutionally excessive, finding that the trial court's order remitting much of the award was an abuse of discretion. The Court also held that the trial court's finding of a breach of the duty of loyalty was contrary to the weight of evidence, given that there was no evidence that plaintiff's departure had cost defendant any business at all, and there was no evidence that the information disclosed was, in fact, confidential.   

Martin v. Keely & Sons, Inc.

Supreme Court Number: 113270

Appellate Court: Fifth District

Appellate Court Case Number: 5-10-0117

Issue Presented: Where the I-beam on a bridge the plaintiffs were constructing collapsed and fell, did the plaintiffs state a triable issue of fact on (1) the "relationship" prong of duty to preserve evidence, and (2) the "foreseeability" prong of the duty, meaning that a reasonable person would have foreseen that the beam was material to a potential civil action?

Appellate Court Opinion Summary: While installing a handrail on a bridge, plaintiffs were injured when they fell from scaffolding supported by an I-beam that collapsed and fell into Maxwell Creek near Sparta. After the accident was investigated by both IDOT and OSHA, defendant broke the concrete portion of the I-beam, and retrieved the steel plates for manufacture of a replacement. Plaintiffs sued for negligent manufacture, negligent design, and negligent destruction of evidence, and the manufacturer and designed counterclaimed against the employer for breach of duty to preserve the I-beam. The president of defendant cited three reasons for destroying the beam: (1) by reusing the steel ends, a new beam would be available sooner; (2) an IDOT representative had expressed concerns that if left in the creek, the beam might cause bridge scouring; and (3) neither IDOT nor OSHA had expressed criticism of the beam, making disposal just "a matter of cleaning up the mess." The circuit court entered summary judgment in defendant's favor on the spoliation of evidence claims. Noting that a duty to preserve evidence presupposes one of the enumerated instances set forth in Boyd v. Travelers Ins. Co., 166 Ill. 2d 188 (1995), the court held that none of the instances were present, and thus no duty existed. The Appellate Court reversed. The court held that the defendant had satisfied the first prong of the Boyd test for a duty to preserve, the "relationship" prong, by voluntarily preserving the beam for IDOT and OSHA. The court further held that the "foreseeability" prong of the test for duty to preserve -- whether a reasonable person should have foreseen that the evidence was material to a potential civil action -- represented a triable issue of fact, since eyewitnesses had heard a "pop" immediately before the beam snapped. Justice Spomer dissented, arguing that the defendants had not created a duty to preserve by merely allowing government agencies to inspect the beam. To extend the duty to preserve to such circumstances, according to Justice Spomer, amounting to finding a general duty to preserve evidence in Illinois.

Link to Opinion

Moore v. Chicago Park District

Supreme Court Number: 112788

Appellate Court: First District, Second Division

Appellate Court Case Number: 1-10-3325

Issue Presented: Does an unnatural accumulation of snow and ice constitute the 'existence of a condition of any public property' as this expression is used in Section 3-106 of the Tort Immunity Act?

Appellate Court Opinion Summary: Defendant's employee pushed snow to the curb in order to partially clear a parking lot. Plaintiff's decedent fell on the snow, breaking her leg. After undergoing an operation to repair the leg, decedent suffered brain damage and subsequently died. Plaintiff filed a two-count complaint for negligence - one count asserting a survivor's action, the second a claim for wrongful death. The defendant's motion for summary judgment was denied, and the defendant moved to certify two questions for interlocutory appeal. On appeal, the defendant asserted an affirmative defense under Section 3-106 of the Tort Immunity Act, which bars liability based on the existence of a condition of any public property used for recreational purposes. The Appellate Court affirmed, holding that snow and ice was not a "condition" under the Act. The Court emphasized that the parking lot and sidewalk themselves were not dangerous; they only became dangerous because of a Park District employee's negligent moving of the snow. The Court also found that the inherently temporary nature of snow and ice supported a conclusion that it was not a "condition" within the meaning of the statute. The Court declined to follow Callaghan v. Village of Clarendon Hills, 401 Ill.App.3d 287, 299-300 (2010), in which the Second District held that snow and ice are a "condition" under the statute. Justice Connors dissented, arguing that snow and ice were a "condition."

Link to Opinion

Toftoy v. Rosenwinkel

Supreme Court Number: 113569

Appellate Court: Second District

Appellate Court Case Number: 2-10-0565

Issue Presented: Does the Farm Nuisance Act, 740 ILCS 70/1, bar a nuisance suit where defendants started a cattle operation on property across from an unoccupied farmhouse, and several years later, plaintiffs demolished the farmhouse and constructed a new family home?

Appellate Court Opinion Summary: Defendants started a cattle operation in 1992 on a large parcel of farmland. The property across the street – part of a large parcel of farmland – contained a nineteenth century farmhouse, which was occupied by a family from 1986 through 1991, and vacant from 1992 to 1997. In 1998, the owner of the property gave a parcel to plaintiffs, and in 2004, plaintiffs moved into a new family residence built where the farmhouse had once stood. In 2007, plaintiffs filed suit, seeking a declaratory judgment and injunctive relief, alleging that defendants’ cattle operation created a nuisance as a result of excessive flies. Defendants’ theory of the case was that plaintiffs’ claim was barred by the Farm Nuisance Act, 740 ILCS 70/1, which provides that a farm cannot become a nuisance because of changed conditions in the surrounding land, so long as the farm has been in operation at least one year. The trial court held that plaintiffs’ construction of the new house did not constitute “changed conditions,” and entered a declaratory judgment in plaintiffs’ favor, and later an injunction. The Appellate Court affirmed, holding that defendants’ farm had not become a nuisance within the meaning of the statute because of the changed conditions – the new house constructed by plaintiffs. The Court affirmed the trial court’s findings regarding the claim of common law nuisance as well. However, the Court reversed the injunction, finding that there was no evidence in the record that the corrective measures ordered would in fact abate the nuisance. Justice Hutchinson dissented from the holding that the Act did not bar plaintiffs’ suit.

Link to Opinion

Wilson v. Edward Hospital

Supreme Court Number: 112898

Appellate Court: Second District

Appellate Court Case Number: 2-11-0085

Issue Presented: Are actual agency and apparent agency separate claims for purposes of the res judicata doctrine and the prohibition against claim-splitting set forth by the Supreme Court in Hudson v. City of Chicago, 228 Ill.2d 462 (2008) and Rein v. David A. Noyes & Co., 172 Ill.2d 325 (1996), so that summary judgment entered on the actual agency claims in plaintiffs’ initial suit bars plaintiffs’ apparent agency claims in a refiled suit, even in the face of a ruling that there is a question of fact as to the apparent agency claims?

Appellate Court Opinion Summary:  The then-minor plaintiff sustained an anoxic brain injury during surgery for a broken leg. He and his mother then sued the hospital, two doctors and their employers, and a nurse. The hospital filed a motion for partial summary judgment, arguing that the doctors were neither its actual or apparent agents. The trial court granted partial summary judgment on actual agency and denied the motion on apparent agency. Plaintiffs then moved to voluntarily dismiss their remaining claims pursuant to 735 ILCS 5/2-1009. Five months later, plaintiffs refiled their action, basing their claims against the hospital on apparent agency. The hospital moved for dismiss, arguing that the new complaint was barred by res judicata and the rule against claim splitting. The trial court denied the motion, but certified the question pursuant to Supreme Court Rule 308 of whether actual and apparent agency were separate claims for purposes of those doctrines. The Appellate Court held that the refiled claim was barred: where one of several legal theories upon which to hold a defendant negligent is adjudicated, the plaintiff must proceed on the others before appealing, or risk having any attempt to relitigate them later barred by res judicata. Justice Schostok specially concurred, agreeing that the result was dictated by precedent, but urging the Supreme Court to take up the question of how res judicata and the rule against claim-splitting apply to a voluntarily dismissed complaint.

Link to Opinion

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Appellate Strategist has organized the pending issues mentioned on The Texas Supreme Court's website according to subject matter for quick reference. We will update this information periodically, as new reviews are granted or opinions are issued. Hope it's useful.

• Alternative Dispute Resolution
• Commercial Law
• Constitutional Law
• Consumer Protection
• Contracts
• Employment
• Family Law
• Government Immunity
• Healthcare
• Insurance
• Intentional Torts
• Judicial Administration
• Jurisdiction
• Juvenile Law
• Local Government
• Negligence
• Other Issues
• Products Liability
• Public Utilities
• Punitive Damages

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[UPDATED THROUGH May 14, 2012]

Brooker v. Madigan

Supreme Court Case Number: 108244

Appellate Court: First District, Division 1

Appellate Court Case Number: 1-07-1876

Issue Presented: Does language of the Illinois Estate and Generation-Skipping Transfer Tax Act, defining an estate's tax liability as the maximum credit "allowed" pursuant to an earlier version of Federal law, permit the estate to avoid state estate taxes by claiming no credit on its Federal return?

Link to Oral Argument audio

Appellate Court Opinion Summary:  As part of a 2001 statute gradually eliminating Federal estate taxes, Congress began phasing out a credit allowed on federal returns for state taxes. Illinois responded by setting the amount of estate tax due as the full credit which would have been computed and allowed under the previous version of Federal law. Decedent died not long after her parents. Decedent's Federal estate tax return claimed no credit for state taxes paid upon the death of her parents because other factors had nearly eliminated any liability. The Circuit Court held that since the estate had claimed no state tax credit on its federal return, the language of the Illinois statute meant no state tax was due. The Appellate Court reversed, holding that the tax due was the maximum credit which could have been claimed. 

Citations to Opinion:       388 Ill.App.3d 410, 327 Ill. Dec. 860, 902 N.E.2d 1246

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[UPDATED THROUGH May 14, 2012]

Rush University Medical Center v. Sessions

Supreme Court Numbers: 112906 & 112993

Appellate Court: First District, Sixth Division

Appellate Court Case Number: 1-10-1136

Issue Presented: Does the doctrine holding that self-settled spendthrift thrusts are revocable per se survive the enactment of the Fraudulent Transfer Act?

Appellate Court Opinion Summary: Defendants' decedent created a Family Trust. In 1995, he made an irrevocable pledge to plaintiff. Following his cancer diagnosis, decedent executed a Revocable Living Trust and then a new will. Before his death, he made no payments on the gift to plaintiff. Plaintiff filed a claim against the decedent's estate, but the estate was insufficient to satisfy the pledge. Therefore, plaintiff filed supplemental claims against two of decedent's trusts. Count I was brought under the Uniform Fraudulent Transfer Act. Count II was for breach of contract, and Count III alleged that decedent's transfer of assets was per se fraudulent under Crane v. Illinois Merchants Trust Co., 238 Ill.App. 257 (1925) and Barash v. McReady (In re Morris), 151 B.R. 900, 906-07 (Bankr C. D. Ill. 1993). The trusts filed motions for summary judgment on counts II and III, and plaintiff filed a cross-motion on count II. The Circuit Court granted summary judgment to plaintiff on count II, the breach of contract claim, and denied the trusts' cross-motions on counts II and III. The trusts' motion to substitute judge for cause was denied. Plaintiff then sought summary judgment on count III, the fraud per se claim. The Appellate Court affirmed with respect to the appeal on the challenge for cause, holding that opinions formed by the judge on the basis of facts introduced or events occurring during the proceeding were not grounds for a finding of bias. With respect to count III, the court held that earlier precedents holding that self-settled spendthrift trusts were fraudulent and per se void did not survive the enactment of the Fraudulent Transfer Act, 740 ILCS 160/5(a)(1), (a)(2).

Link to Opinion

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[UPDATED THROUGH May 14, 2012]

Vincent v. Alden Park Strathmoor, Inc.

Supreme Court Case Number: 110406

Appellate Court: Second District

Appellate Court Case Number: 2-09-0625

Issue Presented: Does a claim for common law punitive damages pursuant to the Nursing Home Care Act survive the death of the nursing home patient?

Appellate Court Opinion Summary: Plaintiff sued as the legal representative of the estate of a deceased nursing home patient, seeking compensatory damages under the Nursing Home Care Act. In his complaint, plaintiff expressly reserved the right to seek an award of common law punitive damages. Defendant moved to strike the reservation on the grounds that any claim for punitive damages did not survive the decedent's death. The trial court granted the motion to strike and certified the survival issue for interlocutory appeal. The Appellate Court reversed. The Court found that there was no specific statutory authority for such an award. The plaintiff also argued that equitable considerations weighed in favor of survival, but the Court held that even if such an exception existed, equitable considerations did not support permitting survival in the case before it.

Citation to Opinion: 399 Ill.App.3d 1102, 928 N.E. 2d 115, 340 Ill. Dec. 396

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[UPDATED THROUGH May 14, 2012] 

Center Partners, Ltd. v. Growth Head GP, LLC

Supreme Court Number: 113107 & 113128

Appellate Court: First District, Second Division

Appellate Court Case Number: 1-11-0381

Issues Presented: Does the doctrine of subject matter waiver for the attorney-client privilege extend from litigation to business negotiations? Can documents shared among partners in a business negotiation be protected by the work product privilege?

Appellate Court Opinion Summary: Plaintiffs were minority limited partners in a partnership acquired by defendants. Plaintiff sued defendants, alleging breach of fiduciary and contractual duties related to defendants' purchase of the ultimate parent of their partnership. Defendants acknowledged that during the negotiations leading to the purchase of the target company, they shared legal advice from their attorneys regarding the purchase. Plaintiffs moved to compel production of attorney-client communications disclosed among the defendants during the purchase negotiations; later, they moved to compel production of all communications, whether or not disclosed among the defendants. The Circuit Court granted the motion to compel, and when defendants declined to comply in order to create standing to appeal, the court held defendants in "friendly contempt." The Appellate Court held that defendants' sharing of all communications relating to the purchase of the target company affected a subject-matter waiver, extending the doctrine of subject matter waiver from litigation to a business negotiation. The Appellate Court also rejected defendants' argument that a subset of the documents was protected by the work product privilege on the grounds that the documents were not prepared in preparation for trial or litigation. 

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Cooney v. Rossiter

Supreme Court Number: 113227

Appellate Court: First District, Fifth Division

Appellate Court Case Number: 1-10-2129

Issue Presented: (1) Was the plaintiffs' action barred pursuant to res judicata by the earlier Federal action, even though the earlier Federal action was a class, rather than an individual claim? (2) Did a court-appointed psychological evaluator in a custody hearing have absolute immunity from suit for alleged misconduct in connection with his opinions?

Appellate Court Opinion Summary: Defendant, a general and forensic psychiatrist, was appointed by the trial court as the evaluator pursuant to 750 ILCS 5/605 of the best custodial arrangements for the children, in response to former husband's petition for change of custody. Defendant opined that plaintiff and her parents suffered from Munchausen's by proxy syndrome, and that the minor children should be removed from the home by reason of child abuse. Plaintiffs sued defendant in Federal court, purporting to allege causes of action under Section 1983. The action was dismissed, and the dismissal was affirmed by the Seventh Circuit. Plaintiffs then sued defendant in state court for infliction of emotional distress and outrageous conduct. The trial court dismissed the action, holding that the action was barred by res judicata, and because defendant had absolute immunity from suit. The Appellate Court affirmed, finding that the previous Federal judgment was res judicata, and defendants were absolutely immune from suit.

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Downtown Disposal Services, Inc. v. The City of Chicago

Supreme Court Case Number: 112040

Appellate Court: First District, Division Four

Appellate Court Case Number: 1-10-0598

Issue Presented: Must a corporation's complaint be automatically dismissed where it is signed and filed by a non-attorney, contrary to 735 ILCS 5/2-619(a)(9), or does the Circuit Court have discretion to decide whether dismissal would serve the purposes of the nullity rule?

Appellate Court Opinion Summary: Between 2007 and 2008, the city Department of Transportation issued appellant four administrative notices for violating City ordinances pertaining to dumpsters. When appellant failed to appear, the Department of Administrative Hearings issued default judgments. Subsequently, appellant's president filed motions to set aside the default judgments for lack of notice. The administrative law officer denied relief, and the appellant's president signed and filed four fill-in-the-blank pro se complaints for administrative review in the Circuit Court. The City moved to dismiss the complaints pursuant to 735 ILCS 5/2-619(a)(9), arguing that the appellant was a corporation and its complaints were impermissibly filed by the corporate president, who was not a licensed attorney. Appellant filed motions for leave to file amended complaints signed by a licensed attorney, arguing that this cured a merely technical defect in the original filings. The Circuit Court dismissed, denying the motions for leave to amend, on the grounds that dismissal was automatic under the "nullity rule" -- filings by an unlicensed person purporting to represent a corporation are null and void. The Appellate Court reversed. Based in part upon the Supreme Court's description of the nullity rule in Applebaum v. Rush University Medical Center, 231 Ill.2d 429 (2008), the court held that the application of the nullity rule was not automatic; rather "courts must consider whether under the specific facts presented, application of the rule would serve its purposes." The Court concluded that no purpose would be served by applying the nullity rule on the facts presented. 

Appellate Court Opinion

EMC Mortgage Corp. v. Kemp

Supreme Court Number: 113419

Appellate Court: Second District

Appellate Court Case Number: 2-10-1175

Issues Presented: (1) Is a judgment of foreclosure final and appealable, or must an appeal await a final order approving the sale and distributing the proceeds? (2) Is an order of foreclosure immediately appealable when standing is challenged on the grounds that the order is void?

Appellate Court Opinion Summary: Plaintiff filed a foreclosure complaint. Defendant answered, denying plaintiff's standing, and counterclaimed, alleging that a third party had acted as the mortgage lender. Plaintiff's motion to dismiss the counterclaim was granted. Defendant filed a further counterclaim for slander of title, and the trial court granted plaintiff's motion to dismiss. The trial court entered a judgment of foreclosure; the trial court moved for reconsideration, and the motion was denied. The court subsequently granted a motion to stay the judgment of foreclosure based on defendant's argument that plaintiff lacked standing. The court subsequently dissolved the stay and denied the motion to dismiss and/or vacate. The Appellate Court dismissed the appeal for lack of jurisdiction, holding that a judgment of foreclosure was non-final without a finding pursuant to Rule 304(a) -- which the order under appeal specifically disavowed. The Court further rejected defendant's argument that the order of foreclosure was immediately appealable on the grounds that it was void, because lack of standing did not render an order void.

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Fennell v. Illinois Central Railroad Company

Supreme Court Number: 113812

Appellate Court: Fifth District

Appellate Court Case Number: 5-10-0504

Issue Presented: Did the trial court err by denying defendant's motion for dismissal pursuant to forum non conveniens of an asbestos injury claim brought by a non-resident of Illinois?

Appellate Court Opinion Summary: Plaintiff filed suit in Pike County, Mississippi, alleging that he suffered from respiratory ailments as a result of exposure to asbestos while working for defendant. The Mississippi court dismissed without prejudice. Seven years later, plaintiff filed suit in St. Clair County, Illinois under the Federal Employers' Liability Act and the Locomotive Boiler Inspection Act. The defendant moved to dismiss based on forum non conveniens, arguing that trial in the plaintiff's home county of Copiah County, Mississippi would be more convenient. The trial court denied the motion, finding that (1) substantial evidence was located near the St. Clair County venue; (2) key witnesses could be compelled in Illinois, but not in Mississippi; (3) St. Clair County was more convenient for plaintiff's expert witnesses; and (4) the citizens of St. Clair County had an interest in asbestos litigation involving railcars traveling through the county.   The Appellate Court affirmed.  Applying the multi-factor public and private interest test, the court found that plaintiff had failed to prove that the plaintiff's choice of forum was inconvenient to it. The court further found that the relative ease of access to witnesses did not favor defendant, since the principal Mississippi-based witnesses were plaintiff's, not defendant's. Further, the court found that documentary evidence relevant to the foreseeability of plaintiff's injuries was in the Belleville offices of the defendant's law firm. The court found that the first public interest factor -- the fairness of burdening residents of either locale with the expense of trial or the burden of jury duty -- weighed slightly in favor of the Mississippi forum, since plaintiff's exposure had taken place there. Finally, the court found that the Illinois forum's docket was not substantially overburdened in comparison to the Mississippi forum's docket. Balancing all the factors, the court found that the defendant had not demonstrated that trial in the Mississippi forum was substantially more convenient. Justice Welch dissented, arguing that the action had no nexus to Illinois, let alone to St. Clair County.

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Khan v. BDO Seidman, LLP

Supreme Court Number: 112219, 112221 & 112223

Appellate Court: Fourth District

Appellate Court Case Number: 4-10-0504, 4-10-0583

Issues Presented: (1) Were the investment bank defendants the fiduciaries of their clients, as a matter of law and fact, with respect to their recommendations regarding certain "investment strategies" alleged to hold tax benefits? (2) Did the plaintiffs' claims accrue prior to the entry of IRS assessments against them with respect to the disputed investments? (3) Does the clause of 735 ILCS 5/13-214.2(b), the statute of repose relating to tax professionals, providing for the last date on which a claim for professional negligence may be brought when an IRS tax assessment has been entered lengthen the statutory period of repose? 

Appellate Court Opinion Summary: Plaintiffs sued the investment bank group of plaintiffs, alleging that they had advised plaintiffs to enter into certain "investment strategies," partially for tax purposes, which instead led to an IRS audit and substantial back taxes and penalties. Plaintiffs also sued the accountant defendants, alleging that they had negligently prepared the tax returns involved. The trial court dismissed all claims, concluding that the claims against the investment bank defendants were barred by the statute of limitations, and those against the accountant defendants were barred both by the statute of limitations and by the statute of repose. The Appellate Court reversed, finding that plaintiffs had adequately alleged breach of fiduciary duty against the investment bank defendants both as a matter of fact and as a matter of law. The Court further held that certain contractual disclaimers were voidable for lack of sufficient disclosure of material facts. The Court further found that plaintiffs' negligent misrepresentation claim against the investment bank defendants was legally sufficient, and that no claims were time barred because the claim did not accrue, as a matter of law, until the IRS assessment following the audit was entered. The Court held that the claims against the accountant defendants were timely on the same grounds, finding that the payment of the accountant's fees for preparing the subject returns were at most a contingent harm, rather than an actual harm sufficient to cause the claim to accrue, until the assessment was entered. Finally, the Court held that the malpractice claim was not barred by the statute of repose found at 735 ILCS 5/13-214.2(b) because the plaintiffs had actually been subject to an income tax assessment, lengthening the statutory period pursuant to the plain language of the statute.

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Magnetek v. Kirkland & Ellis, LLP

Supreme Court Case Number: 112910

Appellate Court: First District, Second Division

Appellate Court Case Number: 1-10-1067

Issue Presented: Does a claim for legal malpractice in a patent infringement suit fall under exclusive Federal patent jurisdiction where the claim rests upon certain defenses which were found in a subsequent suit involving another party to render the underlying patent unenforceable?

Appellate Court Opinion Summary: Defendant represented plaintiff in a patent infringement suit. The parties agreed to arbitrate the matter, and the arbitrator awarded the suing inventor damages for infringement. Subsequently, the plaintiff moved to vacate the arbitrator's award based on fraud in obtaining the underlying patent, but the motion was denied. In a subsequent infringement case involving the inventor and an unrelated third party, the patent at issue was declared unenforceable, largely upon the grounds urged in the plaintiff's motion to vacate. Plaintiff sued defendant for malpractice, alleging that defendant was negligent in not finding the evidence of invalidity soon enough for it to be raised in the underlying infringement action. The trial court granted defendant's motion to dismiss, finding that in order to establish the proximate cause element of the malpractice claim, plaintiff would have to prove that but for defendant's alleged negligence, it would have prevailed in the infringement action -- a substantial question of Federal patent law. The Appellate Court pointed out that under Federal law, a finding of patent invalidity in one action could be used by future litigants against the patent holder pursuant to collateral estoppel. Accordingly, the Court found that because the patent at issue had been found invalid in a later suit, largely upon the grounds urged by the plaintiff here, no disputed question of Federal patent law was at issue in the malpractice claim. Since it would be unnecessary to answer any substantial and disputed question of Federal patent law in order to adjudicate the malpractice claim, the Appellate Court reversed the trial court, finding that the state courts had subject matter jurisdiction over the malpractice claim.

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Mashal v. The City of Chicago

Supreme Court Number: 112341

Appellate Court: First District, Sixth Division

Appellate Court Case Number: 1-09-2484

Issues Presented: (1) What is a 'decision on the merits' under 735 ILCS 5/2-802 that would preclude the entry of a class decertification order? (2) Whether, in a class action case challenging defendants' practice of issuing parking or standing violations to taxicab drivers and others by mail and without any personal service on the driver or placement of the citation on the offending vehicle, a prior Judge's ruling that the defendants' 'practice of sending a second notice of a parking or standing violation prior to an initial notice being either hand delivered to the driver of the vehicle or affixed to the vehicle is violative of the plain language of the statute and the ordinances' constitutes a decision on the merits under section 2-802 of the Code such that a subsequent judge presiding in the case lacks the authority to decertify the class? (3) Whether, in a class action case challenging defendants' practice of issuing parking or standing violations to taxicab drivers and others by mail and without any personal service on the driver or placement of the citation on the offending vehicle, a prior Judge's ruling that denied the defendants' motion for partial summary judgment on the application of their affirmative defenses of failure to exhaust administrative remedies, res judicata, the collateral attack doctrine, and the voluntary payment doctrine constitutes a decision on the merits under section 2-802 such that a subsequent Judge presiding in the case lacks the authority to decertify the class? (4) Whether, in a class action case challenging defendants' practice of issuing parking or standing violations to taxicab drivers and others by mail and without any personal service on the driver or placement of the citation on the offending vehicle, a Judge's ruling that granted in part the defendants' motion for summary judgment on the application of the statute of limitations constitutes a decision on the merits under section 2-802 such that a subsequent Judge presiding in the case lacks the authority to decertify the class.

Appellate Court Opinion Summary: Plaintiff sued the city, challenging the practice of issuing "fly-by" traffic citations to taxicab drivers and others -- citations received by mail, without personal service on the driver or placement on the offending vehicle -- pursuant to the Illinois Vehicle Code and the Municipal Code. The court granted the plaintiff's motion for partial summary judgment, agreeing that the practice was unlawful. After the first judge retired, a second judge adjudicated the City's motion for partial summary judgment, holding that all claims accruing before the statute were barred. Some time later, the court granted the City's motion to decertify the class. Subsequently, the Supreme Court entered a supervisory order directing the circuit court to certify the four questions set forth above for appeal. With respect to the first question, the Court held that a complete determination of liability on a claim based on facts disclosed by the evidence was necessary to amount to a "decision on the merits." The Court found that prohibiting decertification only once liability has been completely determined serves the purposes of decertification by avoiding inefficiency and waste of resources. With respect to the second question, the Court held that the prior decision did not bar decertification because it was not a complete resolution of the merits. With respect to the third question, the Court held that the court's power to order decertification was not lost, because although the court's order on failure to exhaust remedies barred certain affirmative defenses, it did not affect the defendants' ability to defend each of the claims on the merits. Finally, with respect to the fourth question, the Court held that the trial court's decision to dismiss some parties was not a final resolution of the merits either.

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Palm v. 2800 Lake Shore Drive Condominium Association

Supreme Court Case Number: 110505

Appellate Court: First District, Division 5

Appellate Court Case Number: 1-08-2436

Issue Presented: Are the provisions of the Chicago Condominium Ordinance giving the right to compel production of documents, and authorizing interim awards of attorneys' fees, preempted by purportedly conflicting state law?

Appellate Court Opinion Summary: Plaintiff requested access to certain condominium association records, alleging various improprieties and deviations from association bylaws. When the association denied plaintiff's request, plaintiff filed suit, seeking an order compelling production. The trial court entered summary judgment in plaintiff's favor and ordered production. Subsequently, the court entered an order granting plaintiff interim attorneys fees. On appeal, the association argued that the Chicago Condominium Ordinance upon which plaintiff based his demand for production was preempted by state law, which provided a different standard for compelling production of documents. The Appellate Court disagreed, holding that the legislature must expressly state its intent to preempt home rule powers in order for state law to trump ordinances in home rule jurisdictions. The Court declined to follow the Second District's decision in Oakbrook Terrace v. Suburban Bank & Trust Co., 364 Ill.App.3d 506. Similarly, the Court held that the provision in Chicago's Condominium Ordinance authorizing an award of interim attorneys' fees was valid and enforceable, since it was not expressly preempted by state law.

Citation to Opinion: 401 Ill. App.3d 868, 929 N.E.2d 641, 340 Ill. Dec. 990

Santiago v. E.W. Bliss Company

Supreme Court Case Number: 111792

Appellate Court: First District, Second Division

Appellate Court Case Number: 1-10-0796, 1-10-0780

Issues Presented: When an injured plaintiff intentionally files a complaint using a fictitious name, without leave of court as provided in 735 ILCS 5/2-401, and subsequent to the expiration of the statute of limitations, files an amended complaint with the correct plaintiff’s name, should the court dismiss with prejudice as a sanction, or because the limitations period has expired and the amended complaint does not relate back to the original filing?

Appellate Court Opinion Summary: Plaintiff filed a tort action alleging injuries sustained while using a punch press. The complaint identified the plaintiff by what would later prove to be a fictitious name, and did not disclose that the plaintiff had ever been known by any other name. Plaintiff filed a First Amended Complaint, and later verified interrogatory answers, under the false name. After plaintiff disclosed his real name during deposition, plaintiff was given leave to file a Second Amended Complaint substituting his real name, but defendants then moved to dismiss as a sanction for committing a fraud on the court, or because the statute of limitations had run and the new complaint did not “relate back.” The Appellate Court affirmed. The Court found that while the misconduct at issue did not warrant the use of the contempt power, sanctions could be justified either for violation of Supreme Court Rule 137 or Supreme Court Rule 213, or under the court’s inherent authority to control its docket. The Court held that although dismissal is not a mandatory sanction under the circumstances, it is a permissible one, subject to the sound discretion of the trial court. Finally, because the original complaint was a nullity, the Court held that the second complaint could not relate back to it for statute of limitations purposes, and therefore, the action could be dismissed pursuant to the statute of limitations.

Appellate Court Opinion

State Bank of Cherry v. CGB Enterprises, Inc.

Supreme Court Number: 113836

Appellate Court: Third District

Appellate Court Case Number: 3-10-0495

Issues Presented: (1) Does the Federal Food Security Act of 1985, 7 U.S.C. § 1631(e), preempt the state UCC for purposes of security interests on crops? (2) If so, does the Act require strict or substantial compliance in order to effectively attach a security interest when crops are sold?

Appellate Court Opinion Summary: A third party executed a note in plaintiff's favor, using certain crops as security. He later sold those crops to defendant. Plaintiff allegedly gave defendant notice of its security interest pursuant to 7 U.S.C. § 1631(e), the Food Security Act of 1985. Plaintiff filed suit, alleging that defendant had failed to protect plaintiff's security interest in the crops. Plaintiff filed a motion for summary judgment, and defendant filed a cross-motion for judgment on the pleadings, arguing that plaintiff's notices failed to strictly comply with 7 U.S.C. § 1631(e). Plaintiff responded that its notices were sufficient under sections 9-320(f) and 9-320.1 of the Uniform Commercial Code, 810 ILCS 5/9-320(f), 9-320.1, as interpreted by the court in First National Bank v. Effingham-Clay Service Co., 261 Ill.App.3d 890 (1994). The Circuit Court granted plaintiff's motion for summary judgment, and denied defendant's motion for judgment on the pleadings. The Appellate Court reversed, holding that the Food Security Act was intended to supplant state law such as the UCC on the same subject. The Court followed the decision of the Eighth Circuit in Farm Credit Midsouth, PCA v. Farm Fresh Catfish Co., 371 F.3d 450 (8th Cir. 2004), holding that Section 1631(e) of the Food Security Act required strict compliance, and defendant had therefore purchased the crops free of plaintiff's security interest. Justice Holdridge dissented, arguing that the Food Security Act requires only substantial compliance.

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[UPDATED THROUGH May 14, 2012] 

Carter v. SSC Odin Operating Co.

Supreme Court Number: 113204

Appellate Court: Fifth District

Appellate Court Case Number: 5-07-0392

Issues Presented: (1) Is an agreement mandating arbitration of all claims for more than $200,000 arising out of nursing home claims void for lack of mutuality on the grounds it is illusory? (2) Is an agreement to arbitrate applicable to a wrongful death claim where plaintiff signed the agreement only in the status of decedent's "legal representative"?

Appellate Court Opinion Summary: Plaintiff, as administrator to decedent, sued defendant, alleging that it had negligently provided nursing home services to decedent, resulting in injuries to decedent and her death. The defendant moved to compel arbitration; the circuit court denied the motion; the Appellate Court affirmed; but the Supreme Court reversed. The matter then returned to the Appellate Court for consideration of further matters not previously addressed. The complaints alleged two claims, one for statutory survival, and one for wrongful death. On remand from the Supreme Court, the Appellate Court first held that the arbitration agreements evidenced transactions involving interstate commerce. Second, the Court held that the arbitration agreements were illusory and thus unenforceable on the grounds that, since they applied only to claims for more than $200,000, they could only apply to the decedent's claims for negligent care, not to defendant's claims for unpaid bills. Finally, the Court held that the wrongful death claims were not arbitrable, since plaintiff's signature on an arbitration agreement was designated as decedent's "legal representative," while the wrongful death claim belonged to plaintiff personally. Justice Spomer dissented in part, concluding that the contracts were not void for lack of mutuality.

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[UPDATED THROUGH May 14, 2012]

Country Preferred Insurance Co. v. Whitehead

Supreme Court Number: 113365

Appellate Court: Third District

Appellate Court Case Number: 3-11-0096

Issue Presented: Is the provision of an Illinois automobile insurance policy imposing a two-year statute of limitations on uninsured motorists claims invalid as against public policy with respect to an accident which occurred in Wisconsin, where the statute of limitations for uninsured motorist claims is three years?

Appellate Court Opinion Summary: Defendant was in an automobile accident in Wisconsin with an uninsured motorist. As required by Illinois law, defendant's policy provided that the insured could make a written demand for arbitration of any claim involving an uninsured motorist, and any such suit was barred two years after the accident. Plaintiff filed a declaratory judgment action, alleging that her uninsured motorist claim was barred on the grounds that she failed to make a written demand for arbitration within two years. The trial court denied defendant's motion to compel arbitration, but the Appellate Court reversed. The public policy of Illinois is to place the injured party in an uninsured motorist accident in substantially the same position he would have occupied if the uninsured driver had been insured. Hoglund v. State Farm Mutual Automobile Ins. Co., 148 Ill.2d 272, 279 (1992). Thus, the question was whether public policy was violated when an insurance policy limited coverage to two years with respect to an accident which occurred in a state where the statute of limitations was three years. The Appellate Court held that the policy provision violated public policy because it altered the rule which would have applied if the uninsured motorist involved in the accident had been insured. Justice McDade dissented, arguing that the laws of another state could not amend or otherwise affect Illinois public policy. 

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Steadfast Insurance Co. v. Caremark RX, Inc.

Supreme Court Case Number: 104906

Appellate Court: First District, Division 2

Appellate Court Case Number: 1-06-1221

Issues Presented: (1) Where an insurer pays its insured's defense costs solely in order to comply with a trial court order, may the insurer seek reimbursement of those payments when the order finding a duty to defend is reversed?  (2) Did the Circuit Court abuse its discretion by permitting the insurer to amend its complaint for declaratory judgment after the order on duty to defend is reversed to state a claim for unjust enrichment?

Appellate Court Opinion Summary: The insurer's insured was sued for allegedly conspiring to obtain undisclosed discounts, rebates and kickbacks for favoring certain drugs.  Insurer denied a defense and filed a declaratory judgment action.  The Circuit Court granted the insured's motion for summary judgment, ordered insurer to provide a defense, and refused to stay enforcement of its order pending review.  The Appellate Court reversed, holding that insurer had no duty to defend.  On remand, insurer filed a motion for restitution, seeking to recover defense costs expended between entry of the trial court's order and reversal.  The Circuit Court held that the insurer's declaratory judgment action was the "functional equivalent" of a defense on reservation of rights, and the insurer was therefore barred from recovering defense costs under General Agents Ins. Co. of Am. v. Midwest Sporting Goods Co., 215 Ill.2d 146 (2005).  The Appellate Court affirmed the Circuit Court's denial of the motion for restitution, finding that although the motion was not governed by General Agents, insurer had not stated any cause of action which could support a remedy of restitution.  However, the Appellate Court reversed the Circuit Court's refusal to permit the insurer to amend to state a claim for unjust enrichment.

Citations to Opinion: 373 Ill.App.3d 895, 311 Ill.Dec. 897, 869 N.E.2d 910

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[UPDATED THROUGH May 14, 2012] 

Ferguson v. Georges

Case Number: 112488

Appellate Court: First District, Sixth Division

Appellate Court Case Number: 1-10-1152

Issues Presented: (1) Does Section 2-56-040 of the Chicago Municipal Code authorize the Inspector General of the City of Chicago to hire private counsel to enforce subpoenas? (2) May the Inspector General sue the Corporation Counsel of Chicago to enforce subpoenas?

Appellate Court Opinion Summary: The Inspector General of the City of Chicago served the Corporation Counsel for the city with a subpoena for unredacted documents as part of an investigation into an employee's receipt of a sole-source contract arguably in violation of the City's ethics and contracting rules. When the Corporation Counsel refused to comply, the Inspector General retained private counsel and sued. The trial court dismissed on the grounds that the Inspector General lacked the authority to retain private counsel, and the documents were protected by the attorney-client privilege. The Appellate Court reversed, finding that Section 2-56-040 of the Chicago Municipal Code, which implies that the Inspector General may take action to enforce subpoenas, necessarily implies the power to employ private counsel to enforce the IG's subpoenas when directed against the Corporation Counsel. The Appellate Court remanded the matter to the trial court for further consideration, on a document by document basis, of the possible applicability of the attorney-client privilege. Justice Cahill dissented from the majority's ruling that the plaintiff had the power to enforce its subpoena in court, including by hiring private counsel.

Link to Opinion

Harris v. Thompson

Case Number: 112350

Appellate Court: Fifth District

Appellate Court Case Number: 05-09-0625

Issue Presented: Does the Local Governmental and Governmental Employees Tort Immunity Act, 625 ILCS 5/1-100, which limits the potential liability of government employees to willful and wanton behavior, or the Illinois Vehicle Code, which regulates the conduct of a driver of an ambulance, whether employed by a public or private employer, whenever using audible or visual signals, govern the conduct of a publicly employed ambulance driver?

Appellate Court Opinion Summary:  Plaintiffs filed suit against defendants to recover for injuries sustained in a collision between their vehicle and the ambulance driven by defendant Thompson. The parties disagreed about the speed at which the ambulance was traveling at the time of the collision, Thompson alleging that the ambulance was traveling at 10 miles per hour, and one of the plaintiffs claiming that the vehicle was traveling at more than 40 miles per hour. Defendant Massac County Hospital District sought dismissal on the grounds that it was immune from liability pursuant to the Local Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/1-101, which limits liability to willful and wanton conduct. The plaintiff then added a willful-and-wanton count, on which the trial court later directed a verdict. The case went to trial on the negligence claim, and judgment was against the defendants, who appealed. The principal issue on appeal was a perceived conflict between the Local Governmental and Governmental Employees Tort Immunity Act , which limits immunity to willful and wanton conduct, and the Illinois Vehicle Code, 625 ILCS 5/1-100, which regulates the conduct of a driver of a public or privately owned emergency vehicle using audible or visual signals. The Appellate Court analyzed various decisions, some of which held that the Vehicle Code governed with respect to the conflict versus others which reached the opposite conclusion. The Appellate Court held that the Vehicle Code's standard governed on the grounds that the statute was the more recently enacted standard, and suggested that the Supreme Court should address the conflict.

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[UPDATED THROUGH May 14, 2012]

Williams v. Board of Review

Supreme Court Case Number: 109469

Appellate Court: First District, Division 4

Appellate Court Case Number: 1-08-2227

Issue Presented: Was terminated employee entitled to a good cause extension of the statutory deadline requiring that an eligible worker must enroll in an approved training program within a certain time in order to be eligible for federally funded trade adjustment assistance benefits?

Appellate Court Opinion Summary: Plaintiff was laid off when her employer, a castings company, closed. She was not informed that not long afterwards, the Department of Labor certified her former employer for trade adjustment assistance (TAA) under the Trade Act of 1974 and its 2002 amendments. Plaintiff first discovered the availability of the benefits six months later, and applied, but was denied on the grounds that she had missed the statutory deadline to enroll in an approved training program, a prerequisite for benefits. 19 UCS 2291(a)(5). On administrative review, the circuit court affirmed the review board’s decision. The Appellate Court reversed. The court noted that the enabling regulations specifically provide for a “good cause exception” from the enrollment deadline. The court rejected defendants’ claim that the 2002 amendments to the statute had superseded the regulation, noting that the amendments are silent on that question.

Citations to Opinion: 395 Ill.App. 337, 335 Ill.Dec 30, 917 N.E.2d 1094

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