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“Good Faith” Requirement in Settlement Contracts as Applied in Two Recent Cases, Koziol and Hartley

"Good Faith" Requirement in Settlement Contracts as Applied in Two Recent Cases, Koziol and Hartley

March 2021

By: Dylan R. Besser

Introduction

Imagine a familiar, somewhat common civil lawsuit scenario: Plaintiff, a construction worker, was injured on the job site when he fell through an opening on a catwalk. Plaintiff files suit alleging negligence against the project’s general contractor, the owner of the premises, and the subcontractor who erected the catwalk. A third-party complaint for contribution is then filed by these defendants against plaintiff’s employer, with standard allegations of failure to train, failure to supervise, and the like. Plaintiff then settles directly with the third-party defendant, his employer, and the third-party defendant files a “motion for good faith finding.” What could go wrong?

Legal Standard

The “‘good faith’ of a settlement is the only limitation which the Joint Tortfeasor Contribution Act (the “Act”) places on the right to settle and it is the good-faith nature of a settlement that extinguishes the contribution liability of the settling tortfeasor.” Johnson v. United Airlines, 203 Ill. 2d 121, 128 (2003) (emphasis added); 740 ILCS 100/2(d).

Torts — Recent Tort Litigation Pertaining to Transportation Network Providers Act

March 2021

By: Christapher L. Clanin

In the last 10 years, it is hard to imagine a sector of the economy that has undergone a more transformative reformation than that of the transportation industry. Early on, many states struggled to adapt to the fast paced changes caused by the now well-known industry disruptors, Uber and Lyft. In many ways, the linchpin that kept the system moving was the adoption of laws accommodating these companies, now known as “transportation network providers.” In Illinois, the Transportation Network Provider Act (“TNPA”) provided the basic framework for working as a transportation network provider in Illinois.

In Doe v. Lyft, Inc., the appellate court waded through the TNPA to answer two important questions: (1) whether the TNPA exempts ridesharing companies from the heightened duty of care and standard of vicarious liability that apply to common carriers and (2) if so, whether the TNPA violated the Illinois Constitution's ban on special legislation. 2020 IL App (1st) 191328, ¶ 1.

A Rock-Solid Contract Comes in Handy on an Icy Night

Hughes v. Southwest Airlines Company, 961 F.3d 986 (7th Cir. 2020)

March 2021

By: Jeffrey F. Clement

When counseling our clients on proper drafting of contracts, our attorneys emphasize the need to foresee potential disputes with customers or vendors and prepare appropriate contract language to mitigate against future exposure. One way this is done is through liability limitation clauses. Another way, as exemplified in the recent decision of Hughes v. Southwest Airlines Company, 961 F.3d 926 (2020), is to contractually specify the remedy and/or course of action to be taken in the event one party is unable to perform the contract. 

The Hughes decision shows how this can be done effectively. Plaintiff, Brian Hughes, purchased a Southwest Airlines (“Southwest”) ticket for transportation from Phoenix to Chicago on February 11, 2018. Southwest had to cancel the flight and informed Mr. Hughes it might be several days before it could be rescheduled. Mr. Hughes asserted the real reason the flight was cancelled was because Southwest “ran out of de-icing fluid in Chicago, leading the airline to cancel hundreds of flights out of and into Midway Airport.” 

Illinois Legislature Passes Bill Allowing 9% Pre-Judgment Interest for Personal Injury Lawsuits

January 2021

By: Jeffrey F. Clement

On January 13, 2021, the Illinois Legislature passed HB 3360. The Bill subjects personal injury actions in Illinois to 9% per annum pre-judgment interest accruing “on the date the defendant has notice of the injury from the incident itself or a written notice.” As to personal injuries/wrongful deaths occurring before the effective date, the interest runs from the effective date of the Act or the date the alleged tortfeasor has notice of the injury, whichever is later. The Bill was clearly designed to benefit the plaintiff’s trial bar who have complained that Covid-19 has resulted in defendants/insurers delaying on resolving or paying out personal injury actions. 

Having passed the Illinois Legislature, the Bill heads to Governor Pritzker for signature and/or veto.

A Peek Into Petitioner’s Past Prevents A Permanent Total

January 2021

By: Francis M. Brady, Karen E. Zimmermann, and Ndubuisi V. Obah

Petitioner was scheduled for a cervical fusion surgery which she and her treating neurosurgeon both linked to a trauma at work. A large umbrella blew over and its pole struck petitioner in the back of the head. Not only was there a physical injury, petitioner also asserted she sustained post-traumatic stress disorder as a result of the incident. She was supported in that claim by her treating psychologist. Both doctors limited her ability to work and no light duty could be afforded. Thus she was and had been for some months on full benefits.

Captain Caterpillar: The Final Word on McAllister

October 2020

By: Rachel E. Smith

A workers’ compensation case concerning carrots, coworkers, and common courtesy, Kevin McAllister’s claim for benefits sent the Illinois courts down a path of self-reflection when considering whether injuries involving common bodily movements arise out of employment.

On August 7, 2014, Kevin McAllister was preparing for the dinner rush at North Pond Restaurant, where he worked as a sous-chef. Part of his process was arranging the restaurant’s walk-in cooler, making sauces, and prepping food items; so, when a co-worker mentioned misplacing a pan of carrots in the walk-in cooler, Mr. McAllister offered help. He thoroughly checked the walk-in cooler, finally kneeling down to search under the shelves. When he stood up, there was a “pop” and his knee “locked up.” He hopped over to a table to try and straighten his leg, failed, and was taken to the emergency room. After presenting his claim for benefits, the Arbitrator found that the injury arose out of his employment, as the act of looking for the carrots in the walk-in was one the employer reasonably could have expected him to perform in order to fulfill his duties as a sous-chef. The Arbitrator found Mr. McAllister’s position so clear and convincing, that it rendered the Respondent’s refusal to pay benefits dilatory, retaliatory, and objectively unreasonable, warranting the imposition of penalties and attorney’s fees, in addition to awarding TTD, PPD, and medical benefits.

  • Chicago Bar Association
  • Workers' Compensation Lawyers Association
  • DRI
  • The Illinois Association of Defense Trial Counsel
  • Illinois Self-Insurers' Association
  • Chicago Bar Association
  • Workers' Compensation Lawyers Association
  • DRI
  • The Illinois Association of Defense Trial Counsel
  • Illinois Self-Insurers' Association
10 South LaSalle Street, Suite 900
Chicago, IL 60603
Phone: 312-425-3131
211 Landmark Drive, Suite C2
Normal, IL 61761
Phone: 309-862-4914
1015 Locust Street, Suite 914
St. Louis, MO 63101
Phone: 314-300-0527
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