This is the first 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. This section introduces the difference between wrongful death and survival actions and discusses briefly how these can be handled to maximize the total recovery to the family. The next 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.
In multi-defendant cases where there is both a wrongful death and a survival count, careful handling of settlements with less than all of the defendants can yield a result which provides a greater total recovery for your client’s heirs and next of kin. This can occur when counsel structures settlements entered into with less than all of the defendants in a way that either (a) yields a settlement for the survival action or the wrongful death action which is in an amount greater than that finally awarded by the jury for one of those elements, or (b) structures the settlement in such a manner that it becomes feasible to voluntarily dismiss the weaker of the survival action or the wrongful death action, leaving only the stronger of the two claims for the jury’s consideration. This can minimize the amount of the set-off to which the defendants would otherwise be entitled from the action presented to the jury. The apportionment of the proceeds from settlements with less than all of the defendants is the key to maximizing the ultimate recovery.
The starting point for this discussion is an understanding of the difference between wrongful death and survival actions. A wrongful death action is brought by the representative of the estate on behalf of the next of kin for the pecuniary losses accruing to the next of kin as a result of the decedent’s death. The next of kin are statutorily defined, and they take without respect to whether the decedent had a will or whether the next of kin were provided for in the will. The survival action is for the conscious pain and suffering and for loss of earnings experienced prior to the death of the decedent. It is for the cause of action that accrued to the decedent prior to his or her death, and on the death of the decedent, the cause of action passes to his or her estate. To differentiate, the cause of action for wrongful death belongs to the next of kin for their losses resulting from the death; the cause of action for survival belongs to the estate of the decedent for losses prior to death.
A review of the applicable case law shows that careful handling of settlements of wrongful death and survival actions can yield a more favorable recovery for the heirs and next of kin with respect to set-offs of settlements against a jury’s verdict.
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.
Foster I and Foster II demonstrate the potential in multiple-defendant cases with both wrongful death and survival claims of achieving a total recovery in excess of the jury verdict. The verdict was for $2,350,000 for wrongful death and $575,000 for survival. The pre-trial settlements amounted to $2,750,000, which was used to set-off the entire verdict for the wrongful death claim. However, none of the pre-trial settlements allocated to the survival action. Therefore, between the $2,750,000 pretrial settlement and the $575,000 verdict on the survival action, the total net recovery to the plaintiff was $3,325,000, an amount that exceeded the total verdict awarded by the jury.
Foster II also stands for the proposition that where there is a pretrial settlement of a wrongful death claim, the set-off is applied to the entire amount of the settlement without respect to how the settlement was allocated amongst the various beneficiaries of the wrongful death claim.
The Patch and Readel decisions show that the trial court has an affirmative obligation to make some assessment of the allocation of the pretrial settlement. Once this determination is made, it is subject to review only for abuse of discretion.
Readel places the burden on the nonsettling defendants to show that the allocation proposed by the settling parties is not fair and reasonable. The procedure by which the trial court determines a fair and reasonable allocation between wrongful death and survival actions is committed to the discretion of the trial court. Readel makes clear that the nonsettling defendant does not have a right to an evidentiary hearing at which the plaintiff is subject to being called as a witness and is subject to adverse examination. Readel also indicates that a sufficient basis for this determination would be discovery materials and affidavits. The holding of Muro that the nonsettling defendants do not have a right to participate in negotiations over the allocation between the wrongful death and survival claims shows that the plaintiff has the initiative with respect to establishing a starting point for the allocation between the wrongful death and survival claims.
Hansen is a case likely to be cited by defendants in future cases where the plaintiff successfully allocates pretrial settlements in such a manner that the nonsettling defendants do not receive a set-off for the full amounts of the pretrial settlements. The case appears to be somewhat of an anomaly because while Foster I and Foster II clearly permit such a result, the plaintiff conceded the issue on appeal. Plaintiff’s counsel should be prepared to argue that in light of the plaintiff’s concession on this issue, the Hansen decision is not truly precedential and that the Foster I and Foster II decisions are controlling.
III. Practice Pointers
The difference between causes of action for wrongful death and for survival in multiple-defendant cases permits counsel to maximize the net recovery for the plaintiff. This occurs where the defendant does not receive a set-off from the jury verdict in the full amount of the pretrial settlements. This can happen in essentially two ways: (1) where the plaintiff successfully allocates pretrial settlements in such a manner that after the verdict, the non-settling defendants do not receive set-offs for the full amount of the pretrial settlements and (2) where the circumstances of the case make proceeding to verdict under only one cause desirable, the plaintiff can allocate a portion of the pretrial settlement proceeds to the cause which will be voluntarily dismissed, thereby denying the defendant a set-off for the full amount of the pre-trial settlements.
In order to effectively maximize the net recovery to the plaintiff, counsel must make a concerted effort early in the case to evaluate the value of the wrongful death action and the value of the survival action. The elements of damages for these causes of action are distinct, as are the evidentiary elements which establish the proof needed to establish the damages. Careful assessment of the separate causes of action should establish that at least in the preliminary stage, one of the causes of action is more valuable than the other or is more easily proved than the other. Once this assessment is made, efforts should be made to allocate as much of the pretrial settlements as possible to the less valuable or legally more difficult claim with the notion that either the jury will return a verdict in an amount less than the amount allocated or that the claim will be voluntarily dismissed prior to closing arguments.Once an assessment is made with respect to the different causes of action, and as soon as enough discovery is completed to ensure that a good liability case has been established against all of the defendants, the plaintiff should take the initiative with respect to settlement negotiations. Because Muro teaches that nonsettling defendants do not have to right to participate in settlement negotiations, the plaintiff should make the allocation an express part of the negotiations. Readel also gives the plaintiff the initiative in establishing the allocation by placing the burden on the defendant to show that the proposed allocation is not fair and reasonable. Settlement negotiations should also be started earlier rather than later, as an early allocation gives the plaintiff a better opportunity to plan the nature of proofs to be offered in support of the most favorable allocation. Further, since Readel makes clear that the defendant does not have the right to call witnesses in an evidentiary hearing to determine the proper allocation, but rather that a hearing is properly conducted based on affidavits and review of deposition transcripts, the plaintiff is in a better position to control the allocation of the settlement when there is less proof in the hands of the nonsettling defendants. For all of these reasons, early movement toward settlement is a key for maximizing the total net recovery.
Consideration should also be given to dropping either the wrongful death or the survival action prior to trial in order to minimize the set-off and maximize the recovery. Why would a plaintiff want to drop one of the causes of action? If there is a decision made to ultimately dismiss one of the causes of action, this decision should be made early but implemented late. This would be based on consideration of the kinds of evidence which must be introduced by the plaintiff and which could be introduced by the defendant. A survival action might be dismissed where the evidence of conscious pain and suffering is thin or very difficult to differentiate from the underlying illness or condition which is the subject of a medical malpractice action. A wrongful death case might be dismissed where proceeding with it would entitle the defendant to introduce uncomplimentary evidence regarding the decedent (e.g., a history of drug or alcohol abuse, frequent unemployment, criminal convictions, etc.) or his or her relationship with the next of kin. Obviously, no cause of action should be voluntarily dismissed where there is some question about the nature of the damages in the remaining cause of action. It would never be desirable to proceed to trial on only one cause of action and have the defendant receive a verdict or a set-off for the full amount of the verdict.
Foster I and Foster II demonstrate that it is possible, through skillful handling of pretrial settlements in wrongful death and survival actions in multiple defendant cases, to yield a total recovery in excess of the final verdict returned by the jury, despite prohibitions against double recovery. By making an early assessments of the merits of the different causes of action and their respective values and by taking the initiative in settlement negotiations, the plaintiff can help improve the ultimate chances of recovering an amount that may be in excess of the jury verdict.
We are pleased to offer a FREE book which Mr. Doyle has written to assist families of victims of wrongful death accidents. In it, we answer many of the basic questions that families have concerning their rights in a very difficult situation. To obtain a free copy of the wrongful death book, either follow the link, click on the image on the right side of this page, or call our office at (312) 263-1080 to request a copy of the book.