Denton v. Universal Am-Can, Ltd.

26 N.E.3d 448

James and Theresa DENTON, Plaintiffs–Appellees

v.UNIVERSAL AM–CAN, LTD., a Corporation; Universal Truckload Services, Inc., a Corporation; David Lee Johnson and Louis Broadwell, LLC, Defendants–Appellants (OMG, Inc., a Corporation; RFX, Inc., a Corporation; and Michael A. Twardak, Defendants).

No. 1–13–2905.

Appellate Court of Illinois, First District, Third Division.

Jan. 14, 2015.

Carlton D. Fisher, Stephen S. Swofford, and Timothy G. Shelton, all of Hinshaw & Culbertson LLP, of Chicago, for appellants.

James M. Roche, of Theisen & Roche, Ltd., of Wheaton, for appellees.

OPINION

Justice LAVIN delivered the judgment of the court, with opinion.

¶ 1 Plaintiffs James and Theresa Denton, Illinois residents, filed a personal injury action against defendants Universal Am–Can, Ltd.; Universal Truckload Services, Inc.; David Lee Johnson and Louis Broadwell, LLC, among others, for a vehicular accident that occurred on an interstate highway in Jasper County, Indiana. When presented with defendants' choice-of-law motion for application of Indiana law, the circuit court instead ruled that Illinois law applied. On defendants' motion, the circuit court granted leave to file an interlocutory appeal pursuant to Illinois Supreme Court Rule 308 (eff. Feb. 26, 2010) and certified the following question for our review: “ Whether Illinois law or Indiana law should be applied to the issues of liability and damages in the present case.” Contrary to the circuit court, we conclude that Indiana law governs the liability and damages issues in this case. We therefore reverse the judgment of the circuit court and remand for further proceedings consistent with our judgment.

¶ 2 BACKGROUND

¶ 3 This litigation stems from a multivehicle accident that occurred around noon on February 8, 2011, on Interstate 65 (I–65) in Indiana. The record reveals that Indiana resident George Kallis,¹ who is now deceased, drove northbound on the southbound lane of I–65, setting off an unfortunate chain reaction of collisions. The vehicles endeavored to avoid the Kallis vehicle, and the semi-tractor trailer truck driven by David Lee Johnson ultimately rear-ended Denton's vehicle. In particular, a police report taken at the time revealed that upon seeing Kallis driving the wrong way, two vehicles slowed and moved to the side. Denton crashed into one of these vehicles and was then propelled into the middle of the highway. Johnson subsequently rear-ended Denton, shoving his car into another vehicle on the side. Denton suffered physical injuries and his wife claimed a loss of consortium. Plaintiffs ultimately received a $100,000 settlement from the Kallis estate. Plaintiffs then filed this case in Illinois, claiming truck driver Johnson was negligent, essentially for failing to keep a proper lookout and failing to reduce speed, resulting in the collision with Denton's vehicle. Plaintiffs alleged the defendants who are party to this appeal either hired Johnson or leased Johnson's truck and, given Johnson's license suspensions, tickets and otherwise allegedly checkered driving record, they were also negligent for hiring him or leasing him the truck. The defendants, in turn, filed answers and affirmative defenses alleging in pertinent part that a third party proximately caused the accident, the damages resulted from nonparties (namely, Kallis), and alleging that Indiana law barred or diminished the claim. Then, within days of plaintiffs' Illinois lawsuit, defendants Universal Am–Can, Ltd., Broadwell, and Johnson filed their own negligence action in Indiana against both Kallis and Denton.

¶ 4 The pleadings, taken altogether, reveal that Universal Am–Can was a Michigan corporation that conducted continuous business in Illinois and also did business in Indiana, but both Universal Truckload Services, Inc. (also a Michigan corporation), and Broadwell (a South Carolina corporation) denied the same allegation. On appeal, defendants have acknowledged that the corporate defendants, although domiciled elsewhere, did business in Illinois. Additionally, Johnson was a South Carolina resident, and Denton was traveling in Indiana for business. The other defendants, who are not party to this appeal, included driver Michael Twardak, an Illinois resident, RFX, Inc. (allegedly a Massachusetts corporation), and OMG, Inc. (allegedly a Delaware corporation).

¶ 5 The exact relationship of the corporate defendants is not clear from the record. According to the trial court order RFX apparently entered into a subcontract with Universal Am–Can to transport goods for OMG from OMG's facility in Illinois. From the pleadings, Universal Truckload Services appears to have been somehow involved in the contract or subcontract. The pleadings also show that Broadwell, an employee of Universal Am–Can, hired Johnson. Universal Am–Can admitted Johnson was acting as a qualified driver on its behalf. A bill of lading in the supplemental record shows that truck driver Johnson retrieved goods from OMG in Illinois for delivery to South Carolina, and he apparently was en route when the accident happened.

¶ 6 Defendants filed a motion to dismiss the case arguing improper venue, and a hearing followed with all parties, save Twardak, present. The trial court denied the motion to dismiss, and defendants subsequently filed a choice-of-law motion to apply Indiana, rather than Illinois, law in this case. The trial court also denied that motion, and this timely interlocutory appeal followed.

¶ 7 ANALYSIS

¶ 8 Defendants now argue, as they did below, that Indiana law should apply to the present case. In essence, defendants argue that Indiana law ought to apply, given that it was an Indiana resident wrong-way driver whose negligence triggered the chain reaction that ended with Denton's vehicle being rear-ended by Johnson. Were Indiana law to apply, as compared to Illinois law, defendants argue, their financial exposure would be far less than the potential exposure under Illinois law, centered mainly upon how the two states deal with contribution, nonparty negligence, along with joint and several liability. This is not an insignificant observation, because a choice-of-law determination is required only when a difference in the law of the states will affect the outcome of a case, as analyzed in light of the forum state. Townsend v. Sears, Roebuck & Co., 227 Ill.2d 147, 155, 316 Ill.Dec. 505, 879 N.E.2d 893 (2007) ; Murphy v. Mancari's Chrysler Plymouth, Inc., 408 Ill.App.3d 722, 725, 350 Ill.Dec. 164, 948 N.E.2d 233 (2011). When conducting a choice-of-law analysis in tort cases, Illinois has adopted the approach found in the Restatement (Second) of Conflict of Laws, which provides that the rights and liabilities for a particular issue should be governed by the jurisdiction with the most significant relationship to the occurrence and the parties. Barbara's Sales, Inc. v. Intel Corp., 227 Ill.2d 45, 61, 316 Ill.Dec. 522, 879 N.E.2d 910 (2007) ; Gregory v. Beazer East, 384 Ill.App.3d 178, 196–97, 322 Ill.Dec. 926, 892 N.E.2d 563 (2008).

¶ 9 Defendants argue they sufficiently alleged that a different outcome favors application of Indiana law. Defendants specifically allege that were Illinois law to apply, they would effectively be barred from arguing that Kallis “was a major or predominant cause” of plaintiffs' injuries, or pursuing apportionment of fault to a settling party. Applying the de novo standard of review to the question of law before us, we are compelled to agree. See Townsend, 227 Ill.2d at 153–54, 316 Ill.Dec. 505, 879 N.E.2d 893.

¶ 10 There can be no serious doubt that the relevant tort law of Illinois and Indiana are quite different. First, the two states have different approaches to allocating fault among joint tortfeasors. In Illinois, all defendants found liable are jointly and severally liable for the plaintiff's past and future medical expenses. 735 ILCS 5/2–1117 (West 2012). A defendant who is at least 25% at fault is jointly and severally liable for all other damages, as well, while a defendant whose fault falls below this 25% threshold is only severally, or proportionately, liable for all other damages. Id. Under Illinois's joint and several liability law, if Johnson were found responsible for 25% of the damages caused to plaintiffs, then he could nonetheless be responsible for the full amount of damages.

¶ 11 Indiana, by contrast, maintains that defendants can only be held severally liable for their own percentage of fault. R.L. McCoy, Inc. v. Jack, 772 N.E.2d 987, 989–90 (Ind.2002) ; see also Ind.Code Ann. § 34–51–2–8 (West 2012). Moreover, Indiana law allows a defendant to prove the negligence of an absent or settling tortfeasor. McCoy, 772 N.E.2d at 990 ; see also Ind.Code Ann. § 34–51–2–14 (West 2012) ; cf. Ready v. United/Goedecke Services, Inc., 232 Ill.2d 369, 383, 385, 328 Ill.Dec. 836, 905 N.E.2d 725 (2008). Under Indiana law, therefore, defendants could defend this case by attempting to persuade the jury that Kallis (even though a nonparty) was entirely responsible or overwhelmingly responsible given the fact that his obvious negligence seems to have set everything else into motion.

¶ 12 By contrast, in Illinois, tortfeasors who have settled in good faith and who have been dismissed from the lawsuit are exempt from section 2–1117 and therefore may not be apportioned fault by the trier of fact. Ready, 232 Ill.2d at 385, 328 Ill.Dec. 836, 905 N.E.2d 725. The trier of fact can only consider the fault of settling tortfeasors if there is evidence to suggest fault by the settling tortfeasors and if plaintiff is allegedly contributorily negligent. Illinois Pattern Jury Instructions, Civil, No. B45.03.A (2012) (citing Bofman v. Material Service Corp., 125 Ill.App.3d 1053, 1060, 1064, 81 Ill.Dec. 262, 466 N.E.2d 1064 (1984) ). Settling tortfeasors, nonetheless, are immune from suits for contribution. 740 ILCS 100/2(d) (West 2012). Under Illinois law, Johnson would be precluded from obtaining any...