This is the second of four web pages which reprints an article which Mr. Doyle wrote for Trial Journal, the legal journal published by the Illinois Trial Lawyers Association. The article addresses means by which careful handling of wrongful death settlements can increase the total amount recovered by the families of victims in wrongful death accidents. The first section introduced the difference between wrongful death and survival actions and discusses briefly how these can be handled to maximize the total recovery to the family. This section discusses case law regarding the allocation of wrongful death and survival claims in settlements. The third section summarizes the legal principles regarding allocation of wrongful death and survival claims in settlements. Finally, there are recommendations for how wrongful death cases should be handled to maximize the total recovery for the families of victims of wrongful death accidents.
Begin at start of article on Maximizing Total Recovery in Wrongful Death and Survival Actions.
II. Case Law Overview
a. Foster v. Kanuri
This medical malpractice action went to the Appellate Court twice, and each of the Appellate Court decisions are discussed below. The two decisions arise from a single jury trial which followed settlements with some, but not all, of the defendants in the underlying litigation.
The decedent died while undergoing a dilage and curetage procedure. She was survived by her husband and a minor son. Suit was brought against three groups of defendants: (1) Dr. Ptasinski and his practice group; (2) Humana Hospital, and (3) Dr. Kanuri. The plaintiff first settled with Humana Hospital for $750,000 and the trial court assessed the percentage of dependency to the husband as 60% and to the son as 40%. The plaintiff then settled with Dr. Ptasinski and his practice group for $2 million. The trial court applied the same percentage of dependency as for the prior settlement. There was no allocation made prior to trial between the wrongful death and the survival actions. The total amount of the settlements received was $2,750,000, with the husband receiving $1,650,000 and the son receiving $1,100,000 in accordance with the percentages of dependency assessed by the trial court.
The case proceeded to trial and the jury found in favor of the plaintiff. The total amount of damages awarded amounted to $2,925,000. The itemized verdict awarded the son $2,100,000 for wrongful death, the husband $250,000 for wrongful death, and the estate $575,000 on the survival actions. The parties filed cross-motions for set-offs. The defendant sought a set-off in the full amount of the pre-trial settlements, which would have left him liable for only $175,000 on the judgment. The plaintiff sought a set-off based on the percentages of dependency assessed by the trial court at the time the orders approving the settlements were entered. The trial court granted the plaintiff’s motion for a set-off, leaving the defendant liable for $1,575,000 in damages, consisting of $1,000,000 to the son for the wrongful death claim and of $575,000 to the estate on the survival claim. The defendant appealed.
1. Foster I
The Appellate Court began its analysis by stating that under both the Contribution Act and under the state constitution’s right to a remedy, a defendant is entitled to a set-off for amounts received from settling defendants, even if doing so reduces the net amount received from a verdict to zero. It noted that where a full set-off is denied, the plaintiff receives double recovery which is precluded under Illinois law. A plaintiff is permitted only one recovery and one satisfaction for injuries claimed pursuant to one cause of action, regardless of the number of theories advanced.
The court then looked at the nature of the claims made, and concluded that the case actually involved two claims, one under the Wrongful Death Act and one under the survival statute. Under the Wrongful Death Act, the claims made are those of the individual beneficiaries. Under the survival statute, the claim is one that accrued to the decedent before his death and survived his death. It held that the method of computing and allocating damages and pre-trial settlements against jury verdicts should not be mutually exclusive of the nature of the claim, but rather the computation and distribution of the losses from the wrongful death and survival claims should be governed accordingly.
The Appellate Court held that when reviewing settlements, the court should consider the percentage of the settlement to be allocated to the particular cause of action. In cases with both survival and wrongful death claims, allocations should be made according to the claim. Damages for conscious pain and suffering and for loss of earnings prior to death should be allocated to the survival claim. Losses of benefits accruing to the survivors should be allocated to the wrongful death claim.
It therefore remanded the case to the trial court with instructions to reconsider the settlement agreements and the jury verdict in light of the wrongful death and survival counts involved and to apportion the set-off of the jury verdict in light of the method espoused in Murphy v. Martin Oil Co. and reiterated in Fountas v. Breed.
2. Foster II
On remand, the trial court granted the defendant’s motion for a set-off of the full amount of the pre-trial settlements, and reduced the plaintiff’s verdict from $2,295,000 to $175,000. The plaintiff appealed, arguing the the actions of the trial court were inconsistent with the mandate of the Appellate Court in Foster I, and that the approach taken by the trial court wrongfully deprived the son of $875,000 of the jury’s verdict by granting the defendant a set-off for not only the amounts received by him from pretrial settlements, but also for the amounts received by his father prior to trial.
The Appellate Court looked at its decision in Foster I and noted that it made an express finding that the case involved claims for wrongful death and survival and that under the provisions of the Contribution Act, the defendant was entitled to have the amounts received in pre-trial settlements set off from the verdict. However, the settlements were received for the husband’s and the son’s loss of society under the wrongful death claim. There was nothing received in the way of pretrial settlements which were allocated to the estate for conscious pain and suffering under the survival claim. The Appellate Court held that the defendants were entitled to a set-off for the full amounts of the settlements for the loss of society under the wrongful death claims, irrespective of how the pre-trial settlements were apportioned between the father and the son. However, since no portion of the pre-trial settlements were allocated to the survival claims, the trial court erred by granting a set-off from the $575,000 awarded to the estate for conscious pain and suffering on the survival action. Accordingly, it reversed the trial court and remanded the cause for further proceedings consistent with its opinion.
B. Other Apportionment Case Law
1. Patch v. Glover
The plaintiff’s decedent was injured in a fall from a second floor landing and sought care from Dr. Kumar. He died two days later. Wrongful death and survival actions were brought against the owners of the property (the real estate defendants) and Dr. Kumar and other health care providers. Prior to trial, plaintiff settled with the real estate defendants for $75,000. There was no apportionment of the settlement between the wrongful death and survival claims. The case proceeded to verdict with the plaintiff receiving a verdict of $50,000 against Dr. Kumar on the wrongful death claim only. Dr. Kumar moved for a set-off in the amount of the pre-trial settlement. The trial court denied the motion for a set-off, and the defendant appealed. Citing Foster I, the Appellate Court reversed, holding that the trial court was required to apportion the settlement from the real estate defendants between the wrongful death and survival claims and then to grant Dr. Kumar a set-off from the verdict on the wrongful death claim in the amount of the settlement apportioned to the wrongful death settlement.
2. Muro v. Abel Freight Lines
The plaintiff’s decedent in this case was killed when he was crushed between a runaway tractor-trailer and a loading dock. A nine-count complaint was filed against three defendants, alleging causes of action under the Wrongful Death Act, the Survival Act, and the Family Expense Act. One defendant settled with the plaintiff for a total of $75,000. There was no allocation of the proceeds among the various causes of action. At the good faith hearing on the settlement, one of the nonsettling defendants objected to the settlement and asked the trial court to apportion the settlement among the plaintiff’s various causes of action. The trial court, over the plaintiff’s objection, allocated the settlement proceeds in the manner requested by the nonsettling defendant and apportioned 85% of the settlement proceeds to the wrongful death claim and 15% to the survival action. The plaintiff had objected to any apportionment, claiming that apportionment had not been included in the terms of the settlement, but argued that if the settlement were to be apportioned, it should be 85% to the survival action and 15% to the wrongful death claim. The plaintiff appealed.
The Appellate Court held that it was the obligation of the trial court to hold an evidentiary hearing to determine whether the settlement was in good faith and whether the allocation was fair and reasonable. It concluded that the trial court erred by entering an order finding that the settlement between the plaintiff and the settling defendant was fair, reasonable, and in good faith without conducting an evidentiary hearing. It instructed the trial court to consider the relationship of the damages associated with the wrongful death and survival actions in making an allocation.
The Muro decision is important because it rejected the non-settling defendant’s contention that it should be permitted to participate in the settlement negotiations between the plaintiff and the settling defendant as to the allocation between the wrongful death and survival actions. It reasoned that public policy favors the voluntary resolution of disputes and permitting a nonsettling party to further its interests by dictating the terms of the settlement through exercise of a veto power over any proposed settlement would not further the resolution of disputed matters. Settlements are not intended to benefit the parties who elect not to settle. A nonsettling defendant is not entitled to manipulate its liability by dictating the method by which settlement proceeds are allocated.
3. Readel v. Towne
The plaintiff’s decedent was admitted to St. Anthony Hospital after an apparent heart attack. An anesthesiologist recommended that she undergo a blood-oxygen test requiring intubation. After she was intubated, the plaintiff received a massive and unregulated flow of air into her lungs which caused an immediate cardiac arrest. She was thereafter comatose and unresponsive. She suffered three additional cardiac arrests before dying 26 hours after being intubated.
The plaintiff, the daughter of the decedent, brought an action against the anesthesiologist and his practice group and against the hospital. At her deposition, she testified that she and the decedent had a close and loving relationship, that they lived nearby in the same small town, that the decedent frequently babysat for the plaintiff’s children, that decedent gave financial assistance to the plaintiff, and that the decedent paid for the plaintiff’s family to go on vacations. The plaintiff made a settlement demand on all defendants, requesting $1.5 million in settlement of the wrongful death claim and $1 million in settlement of the survival claim.
The plaintiff reached a settlement with the hospital, but not with the anesthesiologist or his practice group. The total amount of the settlement was $750,000, and the release recited that the plaintiff intended to allocate $650,000 of the settlement to the survival action, $80,000 to the wrongful death action, and $20,000 to the Family Expense Act claim. The hospital filed a motion for a good-faith finding, and the nonsettling defendants filed a motion objecting to the allocation of the settlements and requesting that the trial court permit discovery and an opportunity to present witnesses at an evidentiary hearing to determine the good faith and proper allocation of the settlement and that the court reallocate the settlement. The trial court granted the hospital’s motion and denied the motion of the nonsettling defendants, holding that in the absence of clear and convincing evidence of collusion or other active bad faith, the court should absent itself from settlement agreements. Finding that there had been no showing of collusion or bad faith, it granted the hospital’s motion for good faith finding. The nonsettling defendants appealed.
The Appellate Court began it analysis by noting that while public policy favors the voluntary resolution of disputed matters through settlement, it also favors protecting the nonsettling defendants financial interests by providing for a full set-off of amounts received through settlement. Once the settling parties represent to the court that they have reached a good faith settlement and make the terms known to the other parties, the burden shifts to any party challenging the settlement to show that it was not in good faith. In reviewing a proposed settlement, the court not only has the obligation to consider the amount of the settlement and the allocation of the settlement between the causes of action. Where there are both wrongful death and survival claims, a trial court has the obligation to assess the fairness and reasonableness of the allocation of the settlement in view of the wrongful death and survival claims involved, and should not make a good faith finding prior to conducting a hearing to evaluate not only the amount of the settlement, but also the allocation of the settlement. The trial court’s findings are subject to an abuse of discretion standard.
Based on the foregoing, it held that the trial court erred by failing to exercise its discretion to determine whether the amount of the settlement was fair and whether the allocation between the wrongful death and survival counts was fair and reasonable. It held that the issue of allocation is a separate question from the good-faith nature of the settlement. It was the obligation of the trial court to determine whether the allocation was fair and reasonable, and if not, to re-allocate it accordingly. While the Appellate Court did affirm the trial court’s finding that the amount of the settlement was in good faith, it reversed and remanded the cause with instructions to determine whether the allocation was fair and reasonable, and if it determined it was not, to re-allocate the settlement appropriately.
The Appellate Court also rejected the defendants’ claim that they were entitled to an evidentiary hearing where they would be able to call the plaintiff as a witness. The type of hearing necessary to determine whether the settlement was in good faith is one which brings out the appropriate facts, and how the hearing is to be conducted is committed to the discretion of the trial court. The trial court had considered the affidavits, depositions (including that of the plaintiff), and medical records, as well as the arguments of counsel, and the Appellate Court concluded that this did not constitute an abuse of discretion.
4. Hansen v. Baxter Health Care
This case was the subject of a recent Illinois Supreme Court decision, but the Supreme Court decision did not touch on the apportionment issue because it had been abandoned by the plaintiff in the Appellate Court. There, the plaintiff brought an action against a nurse, a hospital, and a product manufacturer for the death of his mother. The plaintiff settled with the nurse and the hospital for a total of $2,880,000. The trial court allocated 85% of the settlement, or $2,448,000, to the wrongful death portion of the claim and 15%, or $432,000 to the survival portion of the claim. The jury returned a verdict against the product manufacturer for the total amount of $18,047,000, awarding 92% of its verdict, or $16,547,000, to the survival action and 8%, or $1,500,000 to the wrongful death claim. The trial court granted the manufacturer a set-off in the amount of $1,932,000, representing the entire wrongful death verdict plus an amount which had been allocated to the survival action in the pre-trial settlement.The defendant appealed, arguing that it was entitled to a set-off for the entire amount of the pretrial settlements. In his brief on appeal, the plaintiff conceded that the Readel decision would require a set-off of the entire amount of the pretrial settlement. The Appellate Court, based on the plaintiff’s concession as well as its own unwillingness to allow a double recovery, modified the judgment to allow for a set-off of the entire amount of the pretrial settlements.
The issue of the set-off was neither raised before nor addressed by the Illinois Supreme Court in its decision in this case.
Continue to Part 3 of Maximizing Total Recovery in Wrongful Death and Survival Actions.
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